1951-10-18

NORTH ATLANTIC TREATY


Hon. Brooke Claxton (Minister of National Defence):: Mr. Speaker, hon. members will recall that in the speech from the throne it was announced:
The north Atlantic nations are steadily increasing their combined strength in their determined effort to maintain peace by providing an effective deterrent to aggression in Europe. To this end an integrated force is being established under the command of General Eisenhower.
The plans for the dispatch to Europe of elements of the army and air force destined to form a part of the integrated force were announced at the last session. The measures which the government proposes at this time in furtherance of these plans will be communicated to you without delay.
This morning an order in council was passed which I now table.
The order in council reads:



P.C. 5598

[Stage Direction]
At the Government House at Ottawa
Thursday, the 18th day of October, 1951 Present:
His Excellency
The Governor General in Council
Whereas the North Atlantic treaty was entered into for the purpose of preserving peace by building up the strength necessary to deter aggression, and, to assist in this purpose, it was decided to form an integrated force in western Europe;
And whereas an integrated force is now being established under the supreme command of General Eisenhower;
And whereas, at the last session of parliament it was announced that elements of the Canadian army and the Royal Canadian Air Force were to form part of this integrated force and provision was made for the appropriate expansion of the army and air force;
And whereas, a Canadian infantry brigade group has been raised and has reached the state of training where it may properly be dispatched to form part of the integrated force, and air force squadrons are being progressively formed, equipped and trained to build up an air division in the integrated force, but pending the provision of airfield and other accommodation some of these are to be stationed in the United Kingdom;
Now therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of National Defence, is pleased, hereby, to make the following order;
Order
In furtherance of Canada's undertakings under the North Atlantic treaty, authority is hereby given for the maintenance on active service of officers and men of the Canadian army and the Royal
Canadian Air Force, not exceeding 12,009 in number as part of, or in the United Kingdom in readiness to form part of, the integrated force under the supreme allied commander.
N. A. Robertson.
Clerk of the Privy Council
While preliminary arrangements are being proceeded with, it is intended that the movement of the brigade will begin in early November and be completed by the middle of December.
The 27th Canadian infantry brigade will, from the time of its arrival in Europe, form part of the integrated force under General Eisenhower and will be stationed in Germany for defence purposes under the North Atlantic treaty with the concurrence of the allied high commission, the present competent defence authority in Germany.
Arrangements have been made to group the Canadian brigade with the British, Belgian and Netherlands forces. The brigade will be stationed in the Hanover area.
No. 410 squadron of the R.C.A.F., equipped with F-86E Sabre aircraft, is proceeding next month on H.M.C.S. Magnificent to England where this and other squadrons, which will follow later, will be stationed at North Luffen-ham airfield in the Midlands pending the provision of airfields and other accommodation in western Europe.
In order to give the house an opportunity to express its approval of our contribution to the integrated force and to our participation in United Nations action in Korea, the Prime Minister (Mr. St. Laurent), after consultation with the leaders opposite, is placing a motion on the order paper in the following terms:
That this house approves the continuance of Canada's participation in the efforts being made through the United Nations to establish international peace, and in particular to defeat aggression and restore peace in Korea, and by the North Atlantic treaty nations to deter aggression and promote stability and well-being in the north Atlantic area.
Right Hon. L. S. St. Laurent (Prime Minister):: To complete what my colleague has said, may I add that in my conference yesterday with the leaders opposite the suggestion was made-and apparently it seemed to meet with approval-that this notice go on the Votes and Proceedings today so that it would be on the order paper as a government notice of motion on Monday, and could be called under the special order as the first order of business on Monday, which would

North Atlantic Treaty Forces afford an opportunity lor the house to discuss this participation in the integrated force, and also to discuss generally Canada's loreign affairs policy.
I understand that the Secretary of State for External Affairs (Mr. Pearson) will at that time communicate to the house the information that is available to the Canadian government on the various troublesome questions in international affairs that are now giving all the free peoples such concern.
Mr.	George	A.	Drew	(Leader of theOpposition): As the Prime Minister indicated, there was discussion as to the bringing on of the notice of motion for the purpose of giving consideration to the announcement by the government of its decision in connection with the 27th brigade, and also providing an opportunity for the discussion of this and related subjects. It was indicated by the Prime	Minister	in	these	discussions thatnaturally there would be the related matters arising	out of	the	present state of international affairs.


Mr. Green:: May	I ask	the Minister of
National Defence a question arising out of his statement? Can he tell the house with what air force the Canadian air units are to be grouped? As I followed the statement it was not mentioned whether they would be with the United States or with the commonwealth groups.


Brooke Claxton: They will not be moving to the continent of Europe for some very considerable time, because there are neither airfields nor accommodation on the continent from which to operate. In the meantime they will build up a wing, in the United Kingdom at North Luffenham under Canadian command, but closely associated with the Royal Air Force, with which we have already been carrying on training operations with the squadron which has been at Odiham, but which is returning to Canada toward the end of this year.
When units of our air force do go to Europe the present intention is that they will be grouped with the United States air force. Our air force will constitute, when it is built up, an air division, which is a formation appropriate to an army. We do not expect to have an army in peacetime in Europe, and consequently it would be necessary to group our air force either with the Royal Air Force or with the United States air force. In view of the fact that our air
force will be completely equipped with F-86E Sabre aircraft of United States design, and for other reasons, it was considered desirable for us to group it with the United States. That was also the advice of the supreme command.



ANGLO-EGYPTIAN TREATY DEFENCE OF SUEZ CANAL    REQUEST FOR STATEMENT BY GOVERNMENT

Mr. George A. Drew (Leader of Ihe Opposition):: Mr. Speaker, quite apart from a report on the general state of world affairs and the matters which obviously present themselves on these subjects on which this house would wish to have information, such as the recent meeting in Ottawa, and other developments of that kind, I suggest to the Prime Minister, though I have not had an opportunity to speak to him about it, the advisability of a statement by the government tomorrow as quite a separate statement relating to the present critical situation in the Suez canal zone. I make that suggestion today in view of the fact that other countries which are associated with Britain in the general problems, such as the United States, France, Australia, New Zealand and South Africa, as well as certain other countries, have already, either in their houses, if they are in session, or otherwise, made statements in regard to that situation and the position of their own governments in relation to it.
I would suggest that instead of having that become part of general informative discussion related to the dispatch of the 27th brigade, we might well have a statement tomorrow, in view of the fact that these governments have already presented to their people their views in that respect.


Louis Stephen St-Laurent: The matter has been receiving very careful consideration by the government, and I know that the Secretary of State for External Affairs intended to speak on it in his statement on Monday; but I am sure that he would be prepared to do so tomorrow if it is the desire to have it at the earliest possible moment.


George Alexander Drew: I do not want to amplify my remarks beyond this. The reason that I made this suggestion as distinct from the other is that since our discussion there has been a formal statement by the governments of the United States and of France, as well as this other statement to which I have referred, and it occurred to me that the people of Canada, as well as the members of this house, would like to have a statement from this government in relation to that particular issue, which is of so much concern at this hour.
(Mr. St. Laurent.]



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: desire to direct a question to the Minister of Transport, notice of which I have sent to him. Since he is not in his seat perhaps the parliamentary assistant will take notice of it, and if he cannot answer me today he may be able to do so tomorrow. For what reason or reasons was the September 15 decision of the board of transport commissioners to change the Prince Edward Island freight rate structure not acceptable to the Canadian National Railways?


Mr. W. M. Benidickson (Parliamentary Assistant to the Minister of Transport):: To
answer the hon. gentleman, certain information must be obtained from the head office of the Canadian National Railways, and it has not been possible to do that in the time intervening since my hon. friend kindly sent notice of his intention to ask this question. The answer will be brought down as soon as possible.



QUEEN CHARLOTTE AIR LINES


[Stage Direction]
On the orders of the day:
Mr. Angus Maclnnis (Vancouver East):: In
the absence of the Minister of Transport I should like to put a question to the parliamentary assistant. Has the serious accident to one of the Queen Charlotte Air Lines planes on Vancouver island this morning been brought to the attention of the minister? Will the department make a statement?


William Moore Benidickson: I can
assure my hon. friend that the air transport board will look into the facts relating to the tragic accident.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. A. J. Brooks (Royal):: I should like to direct a question to the Minister of Veterans Affairs. My question is based on an item which appeared in the Toronto Daily Star on Wednesday, October 17, and which states under the headline "War pensions to be boosted 25 per cent"-


Mr. Speaker:: Order. Perhaps the hon.
member will ask his question.
Inquiries of the Ministry


Alfred Johnson Brooks: Thank you. My question is: Will the minister tell us if the above statement is correct? If so, when will the necessary legislation be presented to the house?


Hon. Hugues Lapointe (Minister of Veterans Affairs):: In answer to a question a few days ago on the same subject I said an announcement would be made concerning this legislation, and I intend to make it in a few days. I think that will answer my hon. friend's question.


Alfred Johnson Brooks: Can the minister tell us what the foundation is, if any, for the report in the Toronto Daily Star?


Hugues Lapointe: I am sure my hon. friend would not expect me to be able to tell him what is the foundation for every bit of news that appears in every paper in this country.



REQUEST FOR STATEMENT ON REPORTED SHORTAGE IN EASTERN CANADA

[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: I should like to direct to the Minister of Trade and Commerce a question based on an article appearing in the Winnipeg Free Press of October 16 headed: "Grain famine hits east as eleven ships await cargo." The article reads:
The shippers attribute the grain shortage to the slow movement of grain from the prairies-


Some hon. Members:: Question.


James Arthur Ross: I wonder whether the minister could make a statement on this very serious situation. I have sent a copy to him.


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, hon. members, particularly those from western Canada, are aware of the difficulty of moving our immense wheat crop to market. It has been particularly difficult to obtain grain of milling quality in quantities to match the boats arriving on both the east and west coasts.
Perhaps I can give my hon. friend the marketings in the prairie provinces during this month to date, to indicate the fluctuations in deliveries. On September 28 there were 941,000 bushels marketed; from September 29 to October 1, 1,500,000; October 2, 2,300,000; October 3, 1,800,000; October 4, 1,500,000. Then we get down to the period from the 6th to the 9th, when there were 6,800,000; the 10th,	7,900,000; the 11th,
10,100,000; the 12th, 11,000,000; the 13th to 15th, 11,300,000; and on the 16th, 7,000,000.
Shipments from seaports on both coasts have been geared to a big crop, and arrangements had been made to move a big crop to market. The grain of milling grades just has

Inquiries of the Ministry not been available to move, either from the lakehead or to the lakehead. You will notice that deliveries to country elevators have improved for the last few fine days, and that grain will reach Montreal in a few days. I do not think the situation there is serious.
But it is a difficult crop to move. We have heard a great deal about serious storage problems. I wish I knew where that grain is in store, of a marketable quality, because I would like to have it forwarded to market.


James Arthur Ross: In Manitoba.


Clarence Decatur Howe: We have had to lift quantity restrictions on milling grades in order to encourage every bit of grain to move into country elevators that could be delivered there. The purpose of lifting the quotas on milling wheat was to get grain to meet export commitments.
Very close attention has been given to the movement. I never have seen anything like the present situation in my forty years of association with the grain business. We are dealing with the situation as best we can. We have all the expert knowledge directed to the problem that it is possible to have, and I believe that in the end the producer will get his wheat into storage, after which every transportation facility of this country will be employed to move it to market.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Speaker:: During the present session a number of hon. members when asking questions have referred to newspaper dispatches and telegrams they have received. That is contrary to the rules of the house. Questions should be asked directly. I did not stop the hon. member who asked his question a moment ago, because other hon. members have read newspaper dispatches. However, in future I would ask all hon. members to abide by the rules of the house.



ENFORCEMENT OF RULE AS TO READING OF SPEECHES

[Stage Direction]
On the orders of the day:
Mr. Speaker:: The other day the hon. member for Fraser Valley (Mr. Cruickshank) wanted to know whether it was intended to change the rules of the house with respect to the reading of speeches. Let me assure him that the committee on rules has not considered that matter-indeed, it has never been suggested to the committee. I have no doubt, however, that the house desires that the rule against the reading of speeches should be adhered to and enforced.


It is a difficult rule to enforce. I believe the only way it can be done is with the cooperation of all members in the house. I thank hon. members for the way they have observed the rule this year, because only in a very few instances have speeches been read. I would ask for continued co-operation of the members in this regard.



REPORT ON RESALE PRICE MAINTENANCE


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: Mr. Speaker, may I ask the Prime Minister if copies of the report of the committee dealing with resale price maintenance will be available to hon. members before the introduction of the government bill indicated in the speech from the throne?


Louis Stephen St-Laurent: Mr. Speaker, I was under the impression that mimeographed copies had been made available to members; certainly it was intended that they should be. However, in the last few days many things have intervened. I can say that it was intended, when it was tabled, that mimeographed copies be made available to all the members. I shall inquire to see what the situation is -because that is still our intention.



NEWSPRINT


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to ask a question of the Minister of Defence Production. In view of the difficulties experienced by weekly and other small newspapers in getting a sufficient supply of newsprint, will the minister discuss with the newsprint controller the possibility of allocating the Canadian supply so that these small papers can get their fair share?


Clarence Decatur Howe: The Minister of Defence Production has many responsibilities, but one of them is not the allocation of newsprint.


Stanley Howard Knowles: But there is a newsprint controller?


Clarence Decatur Howe: Yes.


Stanley Howard Knowles: Under your control.


Clarence Decatur Howe: I will call the question to his attention and try to ascertain from him if anything further can be done to allocate newsprint equitably.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Wednesday, October 17, consideration of the motion of Mr. Robert Cauchon for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto of Mr. Drew, and the amendment to the amendment of Mr. Coldwell.
Mr. Rodney Adamson (York West):: Mr. Speaker, before proceeding with my main remarks today I should like to record my hearty approval of the brief submitted by the Canadian Legion with regard not only to the war veterans allowance, but also to an increase in basic pensions. I do this out of the sincere conviction that an injustice has been done to the veterans of both wars, owing to the increased cost of living. I do not propose to labour the point at length, because other speakers have dealt with it fully and efficiently. I would add only this, that in this battle against inflation any measure we can have to make useful work or to allow our citizens to do more work should be encouraged. In my opinion the prohibitions in the war veterans allowance regulation not only work a hardship upon those who receive the allowance, but at the same time are also directly inflationary because they prevent the doing of a great deal of creative work. I say that to exclude from the old age pension those who are receiving war veterans allowances is unfair and discriminatory.
I realize that to increase the basic pension is inflationary. At the same time we owe a debt to these veterans, a debt which is their right; and as a matter of simple justice in my opinion it is our duty to see that their pensions are brought into line with the current high cost of living.
There appears to be considerable apprehension as to the intention of the government to act on the recommendations of the committee set up to study combines legislation with regard to resale price maintenance. I have read the report and several of the briefs, and I respectfully submit that the conclusions of the commission are at least open to examination on the evidence submitted to them.
It seems to me that undue weight has been given to the opinions of those who advocate legislation to prohibit price maintenance. I suggest in all the humility of a private member that some of the evidence on which their decision was based is at least questionable, and I believe part of it to be untenable. Before
The Address-Mr. Adamson I continue I am going to make the request that a committee of this house have the opportunity to hear the evidence which led to the present decision and any other evidence that may be available before legislation to implement these recommendations is introduced. I have neither the time nor the ability to deal with the matter exhaustively.
Some of the reasons why I am advocating action are to be found in the report. I do not intend to deal with the evidence favouring the continuance of price maintenance, but rather with that which opposes it. To begin I should like to quote from page 17 of the report where a paragraph from one of the briefs which the committee apparently considered in arriving at their judgment is set out. This reads:
In price-maintained lines, these normal competitive forces are largely done away with at the distributive level, and an artificial method of pricing merchandise is substituted, by the manufacturer or supplier, at what he thinks the product is worth... the manufacturer has no knowledge of the retailers' cost of doing business, and, yet, by price maintenance, he maintains control over the operation of the retailer in whose business he has no financial interest and in which venture he is taking no risk.
Is that true? It seems to me that most manufacturers take a great deal of interest in the welfare of their dealers. It seems to me that dealer conventions, dealer selling techniques and dealer associations are of prime interest to the manufacturer. He must see that his dealers are carrying on a profitable business; otherwise he will have no outlet for his product. Therefore I think that that recommendation is open to serious question. I turn now to page 18 of the report, where there is a paragraph headed "Makes for Unstable Production", which reads:
The opponents of resale price maintenance seem to agree that the practice brings more stability into the price structure. That stability is not viewed as an advantage, however, since it is alleged that its consequence is unstable production.
I should like to quote another paragraph from the brief upon which that opinion was apparently based.
The main argument by manufacturers and distributors appears to be that resale price maintenance prevents price wars or unfair price cutting and thus brings about more orderly conditions in the market. The practice certainly does these things-it prevents price cutting-and, at times of low demand, transfers "chaos" from the price market to the employment market. We would suggest that our system has progressed not because of rigidities in the price structure but in spite of them.
Is that so? Is employment aided and improved by chaos in the price structure? Is not employment likely to be more stable with a regular selling price and rate structure? If we have chaos in the price structure, if the cost of goods is so much one day and a third less another day, is the manufacturer likely to

The Address-Mr. Adamson be able to set his program for the year ahead and be able to let his employees know how long their term of employment is likely to be? I think that this contention is certainly open to question. If the manufacturer knows that his price will be stabilized, is he not more likely to be able to say to his employees, "As long as we can sell these goods, and we can at this price, your security of employment will be maintained"? I feel that that argument of the committee is certainly open to question. Then I come to another paragraph in the report, at page 19, which reads:
Resale price maintenance does not only prevent improvements in efficiency, it may also protect inefficiency. The only margins which are satisfactory to all distributors are those which are sufficient to keep in business the retailers whose costs are highest. That is why it is stated1 that "markups are invariably set at levels to keep in business inefficient distributors."
Have we not witnessed a tremendous increase in marketing efficiency at the retail level? I think we have. Have we not witnessed a tremendous increase in the efficiency of the services rendered at the retail level? I suggest that we have. In the face of the competition of other manufacturers making the same goods, would a manufacturer deliberately keep on a dealer or distributor organization that was inefficient? From my observation of business I contend that one of the first things a manufacturer thinks of is to pep up his selling organization, to see that they are efficient, to see that they can sell goods at a competitive price. If he does not do that, his selling organization becomes inefficient and expensive, he loses business and is likely to be put out of business. I quote now from page 21 of the report:
The direct and immediate effect of resale price maintenance is the elimination of price competition among retailers in price-maintained goods; this is one of the main objectives of the practice. It has been argued that competition is merely transferred from price to service. On this point, we find ourselves in agreement with the British white paper.
That British white paper states:
It is often said that the practice does not prevent traders from competing in the services they give. But this begs the question. It is true that, in order to attract more customers, a trader may increase the amount and quality of his service. But the potential customers may be comparatively indifferent to extra service, whereas they would be glad of the original amount of service at a lower price. It is this alternative which resale price maintenance stops the trader providing.
That is from the United Kingdom Board of Trade statement on resale price maintenance of June 1951, page 5. Are we in Canada to base our method of pricing on United Kingdom opinion, disregarding the different views with regard to private enterprise and nationalization held by that socialist government and by our government? The system of

marketing in England is entirely different from marketing in Canada. Marketing in England as I remember it, and as I saw it this year, provides practically no service whatsoever. You queue up to get the goods, take them home, and are thankful that you have got anything. Therefore I question whether we can admit the British white paper as being an accurate and proper guide for us in Canada at the present time. Then I come to the next point as to the committee's views. On page 23 their report reads:
Although precise information is lacking, there is some evidence that resale price maintenance contributes to price stability but that the general level of prices, thus stabilized, is higher than it would be under competitive conditions and production more unstable. Comparisons between competitive prices and maintained prices are difficult to make and must be interpreted with prudence. One of the most serious attempts to effect such price comparisons was made in the United States by the federal trade commission. Although the study was made with special reference to the drug trade, similar results were observed in other sectors. It led to several conclusions which are reproduced by A. R. Oxen-feldt in his book "Industrial Pricing and Market Practices." . . .
The gentleman in question is unquestionably an expert but here again the members of the committee have based their judgment very largely, because he is quoted at length, on the opinions of one man. I suggest with all sincerity that those opinions are individual opinions and to transfer them holus-bolus to our economy is at least somewhat dangerous. Again there is the possibility that, as with other experts, he may be wrong.
I come now to the question of the loss leader. The committee say that they are going to find direct weapons to curb the loss leader, and on page 27 of their report there is the following:
Resale price maintenance no doubt helps to protect the reputation of branded goods and facilitates advertising and sales promotion. However, the committee is not convinced by the argument that the reputation of branded goods greatly suffers from normal price variations and that people will think quality has deteriorated, if prices are allowed to vary. If the "loss leader" is taken care of, normal price reductions will not cause serious problems to the manufacturer.
That is not the opinion generally shared in the United States after the recent price wars that have been going on in the large department stores in New York such as Macy's and Gimbel's. As a matter of fact many manufacturers of brand name products took full-page advertisements in the United States press to state that the quality of their goods had not deteriorated and that they were not in favour of ruthless price wars. If there had not been the fear that such price wars create in the minds of the public, the

feeling that the quality of brand name products has deteriorated, surely the manufacturers would not have gone to the trouble of spending money on advertisements to combat that feeling. Finally, with respect to the loss leader, which is a device that all hon. members know about, the last paragraph of the report states:
As to the "loss leader" device, the committee believes that it is a monopolistic practice which does not promote general welfare and therefore considers that it is not compatible with the public interest. However, we do not believe that it presents any immediate danger; extreme forms of price cutting are not very likely in this period of inflation and relative scarcity. Moreover, we are convinced that there can be found other effective and more desirable methods of controlling the "loss leader" than minimum resale price maintenance. Present circumstances afford time to make a careful study of such methods and the committee, therefore, does not think it imperative to make an immediate and hasty recommendation regarding that practice.
The report mentions weapons to curb the loss leader. What weapons has the committee? They must be secret weapons because they are not mentioned. I want to quote what Q. Forrest Walker, economist for R. H. Macy and Company Limited, has to say about the loss leader. I may say that R. H. Macy and Company and Mr. Walker in particular are adamant and violent opponents of resale price maintenance. This is what he has to say:
While the deepness of the price cut will vary with the type of merchandise, the size of unsold stocks, selling conditions, and numerous other factors, the most generally recognized principle is that the price must be reduced at least one full price range. The saving to the customer must be large enough to create a strong buying appeal. If the marked-down price produces a sharp increase in customer traffic, enough other merchandise may be bought by shoppers at regular prices to reduce the cost of the mark-down. For many types of merchandise, an advertised reduction will not ordinarily be very effective if it is less than 15 to 20 per cent. A greater reduction may sometimes be required.
What does he mean by that? Putting it very simply he means that a whopping great reduction will induce customers to come to the store and buy other products. The use of the loss leader must in his opinion involve a reduction of 20 per cent or more to be effective. Although he does not use the term "loss leader", that is what he means. What does that do to the small retailers? A firm that can stand the gaff, that can have a loss leader, can attract a great number of people for a time by that loss leader in the hope, as Mr. Walker of Macy's has said, that they will buy other goods at regular prices. In other words, the big operator can put the squeeze on the small operator, and that is exactly what has happened and what will happen.
The Address-Mr. Adamson
I am speaking this way today, Mr. Speaker, out of conviction. I believe that there is no more important thing in Canada today than orderly marketing with a reasonable profit and stable labour conditions. If you have chaotic marketing you are going to have chaotic labour conditions, not only in the retail trade itself but in the manufacturing industries that are supplying the retail trade.
I wish to briefly mention one or two of the retail trades. First of all, let us take the drug trade. The first question that we may ask about the retail drug trade is, has it gouged the public? Has it made excessive profits? Apparently none of the druggists are getting very rich. The average mark-up is between 25 and 35 per cent, which is the normal cost of selling. Their service to the community is as an assistant to the doctor. The retail drug store is in a rather peculiar and unique position, because it also serves the doctor as the maker of prescriptions, the provider of surgical instruments and chemicals. There has to be a professionally trained man in charge of the drug store to make up prescriptions and do the dispensing. A great variety of goods are offered, and a multiplicity of brands compete with each other.
Surely, there can be no monopoly in toothpaste. I believe there are some seventy odd brands of toothpaste currently being offered in Ottawa at prices ranging from 20 cents to 70 cents. Surely, there can be no monopoly in the *toothpaste business. As for most of the patent medicine iand other goods, the same condition will be found to obtain.
Let us go to another important aspect of the problem. It seems to be forgotten, but the function of a drug store is to provide drugs, such drugs as penicillin and other antibiotics. What has happened to the price of those drugs? At the end of the war
100,000	units of penicillin were selling for about $27. Today 100,000 units of penicillin sell for 35 cents. Two years ago cortisone sold at about $50 a vial, and today the price has been reduced to $25.50.
I am not going into the various details of these new drugs. Here we have an example of how the cost of drugs has been brought down through competition between manufacturers. I have in my hand a letter to one of the drug stores in the city of Ottawa from Merck and Company giving the new reductions in the price of Cortone. The first paragraph of the letter reads:
It is our pleasure again to inform you of a significant reduction in the price of Cortone (Cortisone Acetate Merck) in saline suspension and tablet form.

The Address-Mr. Adamson
The prices are as follows:
Saline suspension of Cortone Acetate, 20 c.c. vial, each vial contains 500 milligrams, wholesale price, $12.75 per vial; retail price, $14.00 per vial.
Oral tablets of Cortone Acetate, 25 milligrams each, 40 tablets per bottle, wholesale price to the doctor, $25.50 per bottle; retail price, $28.00 per bottle.
I submit in all seriousness, Mr. Speaker, that is not gouging the public. If you throw the retail business of this country into wild price cutting you are, in the long run, aiding neither the industry nor the consumer and you are certainly not aiding labour employed either in the retail business or in the manufacturing industry.
Let us take one more example. Motorcar manufacturers make parts which are sold through agents on a price basis. These agents are dealers who sell the various motorcars. Through other outlet agencies such as the Canadian Tire Corporation you can also buy other goods which will do the job. Either you can put in your car the material made by the manufacturer of that car, and sold through his agent, or you can buy-I shall not say substandard parts-other parts which may do the job. These can be purchased at a lower price. Is that competition, Mr. Speaker? Of course it is competition. You can buy goods sold by the manufacturer of your own car, and recommended by him, or you can buy other goods from a general supplier. I am just giving some examples of existing basic competition.
Consider the oil companies. People holler about the oil companies. There is a practice which is known as following the market leader. Most standard brands of gasoline are sold at identical prices, in the same town or district. There is, however, a firm operating in metropolitan Toronto, and in other cities, which sells gasoline at 5 cents under the price established by the market leader technique. Is that competition? Of course it is competition. This firm is selling it at the lowest price possible, but there seems to be room for the oil companies and for the independent firm.
There is no law against the independent selling oil and gasoline at any price he chooses. The independent, however, does not- as do the major companies-obligate himself to sell oil and gasoline throughout the entire territory. He sells it in the densely populated areas, such as on the main traffic arteries of metropolitan Toronto. The major companies sell oil all through their territory. Many rural stations are not profitable in the wintertime, but nevertheless they are maintained as a service to the community. I suggest that these are some of the things which must be considered in the retail selling price.

There is in the world today a tendency to consider that anyone who makes a profit is either a knave or an exploiter. To those who hold this view I say that democracy and freedom are possible and exist only under a capitalist economy, and there can be no capitalism without profits.


Mr. James Sinclair (Coasi-Capilano):: Mr. Speaker, yesterday when the hon. member for Lake Centre (Mr. Diefenbaker) was speaking he said that he thought this session would probably be called the inflation session. I think that he is right in that assumption, because certainly there is no more important domestic problem in Canada today than this matter of inflation. Even the old age pension legislation, which is the prime reason for calling this session, is to a degree based on the necessity of providing to those on pension relief against the increased cost of living in recent years. As a matter of fact, across the country-and certainly from listening to speeches in this house-it would seem that the only real domestic problem we have is the high cost of living. Never before in our history in this land have we had as high employment, as high production and as high a national income.
I heard a good deal about inflation this summer, because I had the good fortune to be selected to go to attend the United Nations economic council as one of the two Canadian representatives. The first two weeks of the meetings of that council in Geneva were devoted to reports on world economic conditions, and in particular to reports from each of the eighteen countries which are members of the economic council as to what they are doing at home to combat inflation. The attitude there is-and it is the right attitude-that while no individual country today can conquer inflation within its boundaries, all countries can do so if they all make a determined effort. In the world at large today, inflation does not lay its rough hand evenly within national boundaries or within world boundaries. The richest countries of the world are the ones which are least affected, and it [DOT] is the poorest, underdeveloped countries of the world which are having the greatest trouble with inflation.
After spending the summer at Geneva, after having listened to the economic experts of these eighteen nations detail what they had done, after having listened to the economic experts of the secretariat say what should be done, I say-and I intend to substantiate it- that no country in the world today has a better record for fighting inflation at home than has Canada.
First of all, I think we had better have it quite clear what inflation is. In the speeches

thus far, some hon. members have confused inflation with high prices. High prices are not the cause of inflation. High prices are the consequence of inflation. The economists of course describe it easily by saying that inflation is caused when there are more claims to wealth-more money, in other words-than there are goods to satisfy them at the time. It does not necessarily follow, as some people have assumed, that you have to have a shortage of consumer goods to cause inflationary pressures. Many countries have grave shortages of consumer goods and a great abundance of purchasing power. In this country today there is no real shortage of consumer goods.


Angus MacInnis: Hear, hear.


James Sinclair: I am glad to hear that the
hon. member for Vancouver East (Mr. Maclnnis) agrees. We certainly have, however, an abundance of purchasing power in the nation today, more than enough to balance the goods we have. Actual statistics of the dominion bureau of statistics show that since 1939 the ordinary available money supply- money in pocketbooks, money in tills, money in savings accounts and checking accounts- has increased over two and a half times while the actual production in the country has increased only twice.
The primary responsibility for this worldwide condition undoubtedly rests with the last war. The last war, of course, was financed partly directly and partly by borrowing. This country had a good record there. We financed almost half the war by direct taxation. But even so we accumulated, as did other countries, this great burden of war debt. More than that, the war saw the most fantastic dissipation of real resources, of manpower and material and no return as far as the production of goods for consumers was concerned. At the end of the war we then had the reaction. First of all, we had the repayment of borrowings, putting great sums of money on the market. In the second place, we had accelerated purchasing as the deferred purchases of the war years-when no goods were available-began to be met. Next-and a powerful factor in world-wide inflation-were the men and the material which were diverted to -the reconstruction of the devastated areas of Europe and Asia, both the liberated countries and the conquered countries. Men and material were diverted away from producing goods for consumers. Because of that
the extra inflow of purchasing power, and the diversion of manpower and material away
The Address-Mr. Sinclair for capital reconstruction-we had an inflationary pressure started, and we saw prices begin to rise steadily.
Then came Korea, and this steady rise became a very steep rise. First of all, there was panic buying by consumers who remembered the shortages of the last war when all our energies were turned to producing the materials of war and not consumer goods. Then came stockpiling by both the free nations and the iron curtain nations, in anticipation of defence needs. These things led to increased demand which forced up prices. Then we began diverting to defence needs more and more of our world resources in manpower and in material. The incomes that these men received were competing for the consumer goods produced by the rest of the world. The materials taken away for capital purposes for defence of course are lost to consumer production. Because of these further factors, prices began to rise still more.
In this country, as in every country, we paid higher prices for our imports. That fact was quickly reflected in consumer prices in the country. Naturally people on wages and people on salaries asked for wage increases to match those higher prices because of imports. Then at the same time we obtained higher prices for our exports; and after all we are a country rich in natural resources. Again, that had a double-edged effect. First of all, the domestic prices for the same goods naturally went up. In the second place, the wages paid in those industries which had a good export market went up quickly. I use the logging industry in British Columbia as an example; I have used it before. When the logging corporations make big profits, naturally the unions want a share of those profits in the form of increased wages, and that sets the pattern for other groups of organized labour and other groups in the country who perhaps are working in industries which are not as fortunate. If they do not give the increases, then labour drifts away from the consumer industries, for example, into those export industries. So there again we had mounting wage costs at home, and wage costs in Canada are 70 per cent of production costs. It does not matter whether you argue that higher prices make higher wages or that higher wages make higher prices, the fact remains that these are pressures which have resulted in this country, as in other countries, in steadily increasing costs and prices. However, here in Canada we had one other extremely powerful factor. How powerful a factor it was I must confess I did not realize until having spent this summer at the United Nations economic council.

The Address-Mr. Sinclair We think primarily of the fact that we expect to spend $1.7 billion in defence in Canada this year as being one of the major inflationary pressures. It is true that defence costs are inflationary, here as in other countries. It is spent to no avail as far as increasing consumer production is concerned; but it is spent to great avail when it means securing our freedom. But we have a far greater pressure in this country. We have a pressure to a more marked degree in this respect than any other free country in the world, in this fantastic flood of capital investment into Canada. This year it is expected to reach $4,500 million, 2h times our defence expenditures. What does that mean? In my province, for example-and I use that province because I know it better- we have this great $500 million project of the Aluminum Company of Canada. Well, they must have labour, and the labour force to draw on was the British Columbia labour force. That labour force had to be attracted away from existing jobs. There is only one way to do that, namely, to make it more attractive so far as wages are concerned. They pay these wages and draw labour away. They also draw materials which otherwise would have gone perhaps to consumer production; and then we have the competition of other industries to hold their labour and materials by matching these wages and prices.
I talked to a B.C. publisher not so long ago who was complaining very bitterly about inflation. He could not see what effect capital investment had at all until suddenly he did recall that the leaders of his union, in demanding increased wages, had said that a labourer for Alcan was making more than a skilled craftsman in their trade was making in the city of Vancouver. But when I was most impressed this summer with the effect of our capital investment was when we were discussing the great problem of economic aid to the underdeveloped countries of the world, -the only way, and the only real way we can save them from communism is to give them economic aid. Those underdeveloped countries constitute almost two-thirds of the world's population. Almost a billion and a half people of underdeveloped countries were represented there at the economic council. Twelve of these members had criticized the world bank for not making a sufficient flow of capital investment available for these underdeveloped countries. The figure that they suggested which could be absorbed usefully was $1 billion of capital investment which should be made available each year for the billion and a half people in these countries. And here in this one little country of Canada with only 14 million people we have had this tremendous capital development

reaching 4J billion dollars this year alone. In the long run it is going to be a great thing. At the moment, with all these new oil plants, refineries, pipe lines, iron and nickel mines and aluminum plants, it is competing on the same labour market and for material and manpower which could be used to produce consumer goods, and it has a most powerful inflationary effect. When these plants are completed and turned into production they will be producing more and more of things we need, providing more and more employment, and we will have turned the corner as far as the pressures they have set up are concerned. There is the problem. The solution is a very obvious one.
The Prime Minister's illustration the other day was about as simple as could be made. When two things are out of balance you bring them in balance by decreasing on one side and by increasing on the other. We have an excess of purchasing power today in Canada. We have sufficient consumer goods, but we have this excess purchasing power bidding for these goods. In most countries of the world they have not only a great excess of purchasing power but a real shortage of consumer goods. And so the aim of this country and the aim of any other country must be to cut down on this excess purchasing power and to increase the productivity of the nation as far as the goods that civilians need are concerned.
I say this quite flatly. Every economist of repute in the western world is agreed on the course which should be followed. First of all, heavy taxes, heavy national taxes, to remove that surplus purchasing power from the money market of the country. Second, the limitation of credit, of both consumer credit and business credit, to cut down on unnecessary spending; and above all to stop bringing onto this market for today's goods not just today's income but the income of a year and two years ahead. Third, to cut down on spending, unessential and essential, both government and individual. That is, as I say, the unanimous opinion of every economist of repute in the western world.
I need say only one thing in this regard. If there is one paper in the western world which commands respect as far as economic matters are concerned it is The Economist of London. No paper has done more in developing the fight against inflation as far as western economic leaders are concerned. In their issue of July 28 this year, in discussing the fight against inflation in Britain, they have this to say:
The way to correct this failure in economic planning is plain enough. It is to remove the surplus purchasing power that made the buying spree possible. The weapons for such an attack are well

known. They are higher interest rates and a larger oudget surplus. There are, admittedly, enormous practical obstacles to the use of such weapons, and io one-the opposition least of all-has yet got down to the details of an effective policy. But the obstacles are political, not economic. The weakness lies, primarily, not in the weapons of economic planning but in the will to use them.
This government has the will and has shown that will to use these primary weapons.
On the actual form that this taxation to reduce purchasing power should take there is, I admit, some diversity of opinion between the leading economists, but here again the great bulk think as follows: Direct taxation, taxation on income, which for ordinary revenue purposes is undoubtedly the fairest since it is based on ability to pay. Because there is a tax on income a man cannot save out of his income money which is taken in taxation before he gets it and so, as a counterinflationary measure it is a tax on saving. On the other hand, and this again seems paradoxical in a time of rising prices, a tax on commodities is a tax on spending. It discourages spending and encourages saving.
In this country of course we know our income tax is progressive. Some say our commodity taxes are not. Commodity taxes generally are not, but by design the Minister of Finance (Mr. Abbott) in this country has made our commodity taxes as progressive as possible. Once again, we have no sales tax or excise tax or special excise tax on primary commodities of food, fuel and building materials. We have sales tax on other things; then we have a special excise tax of 15 per cent on certain items, and we have a 25 per cent tax on less essential items, and of course we have special luxury taxes on tobacco and liquor. The higher the income bracket a man is in, the more he is going to spend on higher taxed commodities.
Quoting again from the same paper-I might say in passing that one thing which struck me at Geneva was the way that the economists of every country, including Russia, Poland and Czechoslovakia, read The Economist's articles on fighting inflation. They read them with tremendous interest. It was the first paper sold out after the papers hit the newsstand. The Economist is here talking about such taxation policies in the issue of August 18, and it reads as follows:
If consumption is to be cut by taxes, It must be by Indirect taxes, which do not discourage men from working hard, and which penalize spending, not saving. Such extra taxes cannot, of course, be confined to luxury goods; the revenue would be as trifling as that from a higher surtax. Adequate indirect taxes would have to fall on articles that are widely used.
Again the article goes on to say that politicians would not have the courage to do that sort of thing effectively. This government has shown that courage in our last budget.
The Address-Mr. Sinclair
The next thing advocated by all reputable economists is to restrict credit. I spoke at some length on this last session, and I do not intend to go into it again, except to say that the comment used by the leader of the opposition (Mr. Drew) in describing it as a squeeze was right. That is exactly what it is intended to do, to squeeze out of the present market the bringing in from next year and the year after future income to compete for today's goods.
To do directly the other necessary thing to increase production is a little more difficult for a government which is not in production such as a socialist or a communist government would be. But we have done that too indirectly, first of all through the allocation of the key industrial commodity of all, steel. Steel today does not go for non-essential capital construction. It is confined to things which are either to help the defence effort or to help produce more consumer goods needed in Canada and in the world. Our second action is financial, postponing depreciation for non-essential constructions. Here we have done exactly the same thing, postponed depreciation, as the British did on the same day they presented their budget, to make investment more attractive in the essential industries than in the non-essential industries. Most important of all-and I get back again to this fact which struck me as a revelation at Geneva, so far as this country is concerned; because one h.-s to travel and see other countries to appreciate best his own country-was the fact that this government has created in Canada an economic climate and a feeling of confidence which has attracted capital investment, investment not only from Canada, not only from the United States and not only from Great Britain, but from almost every country in the world, including that country which has always been the banker of Europe, namely Switzerland. The Swiss banks themselves are now turning to investments in this country.
Again I wish to quote an authority not partial to the Liberal party and this time I turn to an article on the financial page of the Globe and Mail of October 15. This appears under a New York byline, and deals with Canada and investment capital. It says:
Canada has attracted international attention as one of the brightest (and politically most attractive) spots in the world for venture capital. The demand for Canadian stocks in recent months has been heavy, with large buying orders coming from the leading cities of Europe as well as from the United States. Buyers reportedly are not concerned about the intermediate action of stocks; they are seeking substantial gains over a period of five to ten years or more.
And then further down:
Some international investment interests reportedly are looking upon Canada with increasing favour, in

The Address-Mr. Sinclair part because of a lessening of confidence in the political and financial outlook of the United States. Canada has gone as far as the United States in social welfare plans, but her fiscal affairs have been handled more soundly than here.
And then again:
Business conditions and price trends in Canada are closely allied with those in the United States. Internal affairs, such as fiscal operations, however, have been soundly administered. This background of conservative-
This is perhaps an unfortunate word to apply to a Liberal government.
-government, together with the well-publicized development of natural resources, may well continue to attract new capital.
That, of course, is the best way to attract new capital here, to build new factories and new utilization of existing resources, to create the extra production so needed not only in this country but in every country of the world.
At this point I shall comment only briefly upon the speeches of the leader of the opposition (Mr. Drew) and my good friend the hon. member for Lake Centre (Mr. Diefenbaker). However, since the leader of the opposition is not at the moment in his seat I shall drop most of the remarks I was about to make concerning what he said.
Actually, I listened to him with great interest. He has, of course, a magnificent command of language, as well as a fine delivery. But I was listening critically because I wanted to find out what he was proposing. What are these flexible controls selectively applied, about which he has talked so much in the country, and which he says will cure inflation? Well, I never heard a word about it in his speech on Monday. Indeed I never heard controls mentioned, so that at the end of his speech I was no wiser than when he began. I read his speech the next morning, just to make sure, but with the same result; he just skated around.
The hon. member for Lake Centre started out by chiding the Liberal members for not having more constructive suggestions to make in their speech on this grave problem. He never mentioned these flexible selective controls that the Conservatives talk about in the country. As a matter of fact he did show his repugnance to the type of controls they have in Saskatchewan, if that is any indication of his broader thinking. What he did do was to twit the cabinet ministers about recent speeches and in doing so he made use of all the eloquent delivery and dramatic gestures we all know and love so well. But when you read his speech too on the following morning, what are his suggestions for combating inflation? None.
He did of course refer to the economists, although every economist in the western


world says that taxation today is the primary way of removing excess purchasing power. He does not agree with them. However, he did get back to one of his favourite subjects, and dusted off his old combine speech which we all enjoy.
I learned a good deal this summer about combines, cartels and monopolies-indeed this has been a very beneficial summer for me- at the United Nations. If there is one country in the world which has tried to wipe out cartels, combines and business monopolies, it has been the United States of America- and this goes away back to Teddy Roosevelt's time.
The Americans have found that no matter how they attacked the problem of monopolies, combines and trusts in their own country, international cartels have to be attacked internationally. With that in mind they put forward a resolution before the United Nations to have an international commission which would deal internationally with cartels beyond the reach of any individual government. I, as the Canadian representative, was glad to second that resolution.
The extraordinary thing to me however was that there was remarkably little enthusiasm around the rest of the table from other nations' delegates. We in this country, and our neighbours in the United States, think that cartels, combines and monopolies are bad. There may be exceptions, but they have to be proved to us. Quite the contrary however prevailed in the minds of the representatives of most of those other countries. They accept cartels, combines and monopolies. The evidence with them has to be proved that they are bad.
Of all the countries around the table, only two others had even any domestic combines legislation. That of Sweden dates back to only 1946-although Sweden did say that their co-operatives had done a good job in combating combines before that time. Legislation in Great Britain was only introduced in 1948, and now the election comes along and the charge is made against the Labour government that they passed legislation but have done nothing. However, they are now promising to put teeth in that legislation after the election. Our combines legislation may need improvement but we are at least in second place in the world in this regard.
I have said that inflation is world-wide. Every government in the world today is trying to fight it. If there were any easy solution of this, one of the fifty-five governments fighting inflation would have found it. In every country, however, the fight goes on, and every chancellor of the exchequer or

minister of finance, whether he be a Conservative, a Liberal or a socialist-or even a communist-is making the same appeal to his people. He is making the appeal to spend less, to save more and to produce more- and this of course does get back to the very root of the problem.
More than that, in Great Britain the former chancellor of the exchequer, the present minister of town and country planning, Mr. Dalton, no longer than two weeks ago advised the housewives not only to spend less but specified what items they should not buy at this time. In every country, no matter what political faith the opposition is, they are decrying what their governments are doing. They say that whatever the governments are doing it is the wrong thing. If they are taking fiscal measures, then they say that controls should be instituted, and if on the other hand there is a controlled economy the oppositions are saying that fiscal and monetary measures, such as ours, should be undertaken.
Across the world most countries are trying to strike at the roots of inflation. They are instituting fiscal and monetary measures, and taking steps to increase production. Some of them are trying to ride the two horses, namely partly fiscal measures and partial controls. All of them are being singularly unsuccessful in this approach. Since the last war two countries have relied almost entirely upon direct price controls, and all the things that go with them. I am referring to Great Britain and Holland.
Across this country we are hearing from the housewives. Perhaps they are not economic experts, but they are concerned with day-to-day prices. They say: "Why do we not have price controls? We had price controls during the last war, and they worked well. Why do we not have them today?" The immediate answer is that this is the same government that enforced price controls during the war, and did it so successfully. Almost the same people are doing the work. Of course Mr. Ilsley has gone, but the present Minister of Finance was at that time his parliamentary assistant and had most of the legislative work to do. Donald Gordon has gone, but Kenneth Taylor is now assistant deputy minister. Since this is the only real domestic issue, this government would certainly, from its experience, adopt price controls, if it thought they would work under today's circumstances.
We need not go into any detail as to why the circumstances are different. The Prime Minister and other cabinet ministers have pointed out the very great differences that exist in a wartime economy, when a country 94699-111
The Address-Mr. Sinclair is fighting for survival, and does not care about expanding industrial production, expanding social services and raising the standard of living, because they are of no importance unless you survive.
Everything is turned to wartime production, for we know that there is only one thing we have to do in wartime, just survive. Price control worked then because we had other harsh measures to obtain this objective. We had tremendously heavy taxation. We had compulsory savings. We had voluntary savings which, because of patriotic fervour at that time, were raised almost by compulsion. All these drained off surplus purchasing power. We had wage controls to stabilize wage costs in prices. We had subsidies which increased rapidly every year but which did artificially lower prices for a time. We had rationing-and had to have it. And with rationing we had all the permits and regimentation described by the Minister of Finance last week in his radio address. Best of all, we had public acceptance. It was a matter of survival; to survive we had to have this regimentation. The public knew it and accepted it.
Today we are fighting two wars, two very different wars. We are fighting a cold war with the communists, by building up our defences so we can resist aggression. This is, however, negative. Then we are fighting another very important war on the economic front, a positive effort, trying to show that free men and a free society can offer a better life and a freer life, a life with better living standards, better opportunities, than can be offered in the police state, and so trying to win the underdeveloped nations to our side.
Therefore it is not only essential that we should devote now ten per cent of our production to defence, but imperative that in (this country we build up our social standards and our living standards, that we vastly increase our production of goods and do everything we can to increase production and to help the underdeveloped peoples of the world who through hopelessness and misery fall prey to communism. This is the real job. That is the reason why this country must expand and use every initiative and skill and incentive of its people, use every capital investment that is possible, to increase production and opportunity.
Price controls do not attack the two causes of inflation. They certainly do not check purchasing power. If anything, they make a little more purchasing power available. They certainly do not increase production; they impede production in every way, when the dead hand of bureaucracy is laid on industry.

The Address-Mr. Sinclair The best proof of that difference between a free economy and an economy regimented by government bureaucracy is to be found in the history of the last six years when the free western world has been so heavily dependent upon the vastly increased production of the free economies of North America.
1 should like to touch now upon what has happened in those two countries where they have chosen to continue with their controls. Holland is perhaps not the best country to take as a comparison because that country has faced many grievous troubles. They took into peacetime their wartime controls, which included over-all wage controls which they still have. They had price controls but they had problems to face in the loss of their colonies and over-population. Despite wage controls and mounting subsidies their price controls have cracked. They could no longer bear the cost of ever-increasing subsidies. In fairness to them it must be said that part of the reason was the increased expenditures they were called to make under the North Atlantic treaty.
Great Britain offers perhaps the best example. I have spent some time studying the British control system. In view of the fact that an election is on I shall try to be as objective as possible and be of assistance to neither side. In view of what the C.C.F. members have said in this debate about the virtues of price control, I found it curious two weeks ago when I was in Great Britain to find that the high cost of living there is the principal election issue. The Tories say they can do better with competition; Labour says that bad as things are, nobody could do better than they have done.
Our Department of Finance has gathered a lot of information, on European controls, as we have financial observers in the different embassies, and I have studied these. However, reading these things does not give you the same understanding as actually being there and discussing matters with the people who are running affairs. The British minister of food and his parliamentary assistant were good enough to give me complete entree into their department. They regretted that because of pressing election demands they could not be with me but they did give me the opportunity to discuss these matters with the men who had the job of running this control system, to discuss both the strengths and the weaknesses.
To begin with, it is understandable why the British continued with controls. First, they had been hit harder than any other country. It had taken them longer to turn around and get back to a peacetime economy. Secondly, they had freely elected by a great

The Address

Mr. Sinclair is paid out of their heavier taxation. Second, there was bulk buying. Bulk buying helped the British at a period when this country and they were willing to take that gamble. The third thing is the wage scales paid for the labour connected with milling in the bread industry in Great Britain, 6 pounds, 7 pounds, 8 pounds a week, $18, $21, $24 a week. I do not think that many of our milling help, our bread men or the bakers in the bakery plants would be satisfied with such wages.
The fourth factor is even more interesting. In Canada, because the Canadian people insist on white bread, we get only 62 per cent recovery from our wheat. The British are very frugal. They get 84 per cent recovery. Their bread may not be as palatable, although in the opinion of some people it is more nourishing and better for you, but the fact remains that the Canadian people do not want that sort of bread. That is the reason for the extraordinary paradox that bread in Great Britain made out of Canadian wheat costs less than bread in Canada.


Mr. Wright:: Would the speaker permit a question?
. Mr. Sinclair: Surely.


Percy Ellis Wright: Do the Canadian millers not get their wheat at the same price as under the bulk buying agreement with Great Britain?


James Sinclair: There was a time when they did not but today Canadian millers get their wheat for exactly the same price as the British get theirs. The next thing which the leader of the C.C.F. referred to was the matter of meat and the ration of 26 cents a week in Great Britain. That is referred to at page 45 of Hansard for October 15 and there is quite an interesting interruption. At that time he said:
In a recent broadcast, which I subsequently criticized, the Prime Minister contended that if prices were controlled there might not be a fair distribution of some scarce commodities without rationing.
That is certainly true; the British say that.
Let me say once again that the Canadian people are rationed now, not by tickets but by a much more cruel, harsh and unjust system of rationing, rationing by the purse.


Mr. Gibson:: Has that not always been true of
every nation at all times?


Mr. Coldwell:: That is an old Tory talking.
I do not think that a perfectly factual statement like that made by the hon. member calls for such a gratuitous insult, because his statement was true.


Mr. Fraser:: It is not an insult to call a man a Tory.


James Sinclair: No matter what country in the world it may be, no matter whether it is a Liberal, Conservative, Labour or communist
rMr. Sinclair.]
administration, where you have a money system, people with money can buy more things than people without money, and nowhere is that more true than in Great Britain today. Let me deal with this question of the meat ration to which the hon. member for Rosetown-Biggar (Mr. Coldwell) has referred. The ration in Great Britain today is 26 cents worth or roughly 9 ounces of meat a week. That does not say that is all the meat the British people can get. British people with money can get much more. That is what the old age pensioner and the white-collar man get. The industrial worker who is organized has canteens that serve a meat meal at noon and he gets more. He has more money.
The man of money in the city can get all the meat he wants quite legally. Restaurants are not controlled. He can eat his lunch and his dinner in a restaurant. The prices are very high. They had price control in restaurants when I was there a year ago and I paid 5 shillings, 6 pence for a dinner. I paid 23 shillings, 6 pence for the same dinner, a little three course meal, on my last trip over there. The man with money in Great Britain can eat in these restaurants morning, noon and night and can eat all the meat he can get. With his money he can buy all the game, fowl and fish, things that are unrationed, that he wants. The prices are high. In a rationed country unrationed things are always very high. Again if he has friends-and those with money always seem to have friends-in Canada, the United States, Ireland or Denmark, they will send him hams, roasts and all the rest of it. All this is legal, and with rationing we have illegal black market as well. There is exactly the same rationing by purse in Great Britain as in any other country in the world.
On the other hand, in Canada today our pre-war consumption of meat of 118 pounds per capita has risen to 134 pounds a year, over 2J pounds a week for every man, woman, child, infant and vegetarian in the country. There is not one Canadian in a hundred who eats less than the British ration of 9 ounces a week.
Then the most unkind remark of all that he made is on page 44 of Hansard when he said that British inflation was due in large part to the inflation in North America. First of all, Great Britain buys as little as it can in the dollar area. Most of its purchases are, by necessity, in the sterling bloc. He mentioned the international materials conference for the allocation of scarce materials, and how it had been unsuccessful and had fallen down. It has not in one respect. Four scarce commodities coming from North

America have been allocated. It is from the sterling bloc that failure has come on the allocation of rubber, tin and wool.
That cannot be blamed on North America. More than that, however, one of the chief causes of inflation in the United States is the incredibly generous aid that the American people gave not merely during the war but since the war to Great Britain and other countries of the world. If it had not been for this pouring of billions of dollars of goods into other countries, for which there was no return, the inflationary pressure would have been far less in that country. Mr. Morrison of Great Britain, more gracious than the leader of the C.C.F., has paid high tribute to them. It ill behooves the leader of the C.C.F., who has urged so often in this house that we do more to help these underdeveloped countries, to criticize inflation in the United States when it is due in large part to their unparalleled generosity.


Mr. Deputy Speaker:: The hon. member has exhausted his time.


Some hon. Members:: Go ahead.


James Sinclair: Finally, I have just one
thing to say, and it will be the last thing which will be distasteful to the hon. member. He said he had a friend who told him we have the highest prices. There are those who say things are always better in any other land. I have had quite an opportunity, in the course of collecting European debts last year and this year, to see quite a bit of other countries and to meet the financial people in these lands and to appraise their situations, and I say it is not so. We have lower prices and higher wages than any European country. But I do not regard myself as a judge. Let me give you two real reasons, two real standards by which to appreciate the standard of living and the future of our country. First of all, I have mentioned the flow of capital. All over the world people think that Canada's is a stable economy, that they are less likely to suffer in this country from whatever happens to monetary affairs in the years ahead and they are willing without any special encouragement to invest their money in Canada. There is this fantastic influx of capital for permanent investment. More important than that, however, all over the world people living in countries where there is no future, hopeless and harassed, turn where for employment, opportunity, better living standards? To what country do they want to come? To Canada and the United States. There is the real test in the judgment of the little people, swayed not by political argument or statistics but by realities. To me
The Address-Mr. Bryce that speaks more eloquently than the member for Rosetown-Biggar and the other members who have spoken of hardships here. That is the real test, which shows that we in Canada have fought the battle of inflation more successfully, have a better balanced economy and, despite the troubles we may have, when viewed in world perspective we are, to use the expression of the Prime Minister, "a happy land".


Mr. William Bryce (Selkirk):: In rising to take part in this debate, Mr. Speaker, I want to congratulate my good friend the member for Coast-Capilano (Mr. Sinclair) on the wonderful speech he has just made for Mr. Churchill. I believe he has done a wonderful job. Having been a Liberal in Scotland before I became a good Canadian, I have always felt that there is not much difference between the Liberals and the Conservatives. When I hear a man like the hon. member, professing to be a good Liberal, making a speech like that for Churchill I am convinced that my thinking is not very far wrong.
In taking part in this debate I wish to bring to the attention of the government some of the grievances of the constituents of Selkirk. I have done this before, but I want to do it again. I want to add my voice to the pleas of various hon. members on behalf of the veterans. During the recess I was able to visit many Legion branches, and to meet many veterans. I regret exceedingly that no arrangements have been made for the setting up of the veterans affairs committee at this session. It was gratifying for me to hear the Minister of Veterans Affairs (Mr. Lapointe) say two days ago that he was giving consideration to that matter.
Along with my colleagues in the house, and other members who have spoken for the veterans, I hope that the veterans committee will be set up. I do not want to review the Legion brief since many members have done that, but I want to add my voice to what they have said. The Legion has a good case to present, and its request is reasonable If the 1939 rate of $100 for a completely disabled married man was not sufficient in 1948 when the government increased it to $125, then the $125 is not sufficient today. It is hardly sufficient to keep body and soul together. Then we have the war veterans allowance which is almost as inadequate. A single man receives $40 and a married man about $70. The Legion request is to increase it to $50 for a single man and $100 for a married man. It must be admitted that no man can live in comfort on these allowances. The veterans are the men who fought for us in two wars. Some were left on foreign fields, while others came back maimed for life. These casualties

The Address-Mr. Bryce were caused when they were fighting in defence of the freedom we all love so well. We can never repay them, but let us do everything possible for the widows and orphans of those who never came back. Let us do everything possible to alleviate the hardships upon these veterans caused by the increased cost of living.
There is one other matter I wish to bring to the attention of the government, and particularly to the attention of the Minister of Agriculture (Mr. Gardiner). I have in my hand a card, one of many which have come not only from my constituents but from other farmers in Manitoba, which reads like this. It is addressed to "Mr. Scotty Bryce, M.P." Dear Sir:
As a dairy farmer. I am taking this opportunity to protest against the unfair competition created in the dairy industry by the importation of low-priced vegetable oils. My investment in dairy livestock, buildings and equipment is tremendous and is increasing every year. The condition created by the importation and rapidly expanding uses of low priced vegetable oils in imitation dairy products is endangering my investment. I urgently request the government of Canada to take immediate action to give the Canadian dairy industry adequate and effective protection against the importation of low-priced vegetable oils which is undermining the security, stability and future of my farm business.
The gentleman signs his name and gives his address. Being a dairy farmer myself, and having shipped milk and cream to Winnipeg for the past thirty years, I can understand the fear experienced by my constituents who are sending me these complaints to put before the government. No doubt, the dairy farmers of Canada have already made representations to the government in this connection. Perhaps the greatest problem facing dairy farmers today is that, with butterfat around 65 cents a pound, the cream shipper is only realizing about $2.30 per hundred pounds for milk testing 3-5. With good cows averaging $400 apiece, it pays a farmer to sell the cow instead of milking her, which is a detriment to the dairy business.
I do not need to explain all this because there are quite a few farmers in the house, and they know the conditions under which the dairy farmer is labouring. I believe the dairy industry is responsible for the employment of about 450,000 people. I do not know the price of milk for cheese, but it is something the same as milk being used for the butterfat content. A farmer who has a dairy herd has spent a tremendous sum of money to set it up. The government has set up t.b. free areas all over the country, and tremendous amounts of money have been spent on the business. It would be too bad if nothing was done to help the industry. I appeal to the government to give serious consideration
to the plight of the dairy farmers so that butter may become more plentiful instead of scarcer.
When the Prime Minister (Mr. St. Laurent) was speaking a couple of days ago he dealt with various prices but especially beef prices. I wish to say something about beef and the packing industry. I followed the Prime Minister's speech very carefully, and his quotation from the Montreal Gazette was as follows:
Major packers are finding that they cannot make even their established average profit of one per cent or less on turnover, and are beginning to operate at a loss, if they buy live animals at advancing present prices, slaughter and process them, and attempt to sell them within retail price ceilings. One company, Armour, showed a loss of $1-6 million in its latest quarterly report, a Cleveland firm has shut down rather than go on losing money, and the big Wilson company has cut back its slaughtering plant operations to three weeks a month.
According to the Montreal Gazette, as read by the Prime Minister (Mr. St. Laurent), that may be the case in the United States; but it is far from being the case here. In Canada our marketings are down on cattle, sheep and lambs, while on calves and hogs they are much the same as in previous years. But the profits of the packing companies still rise. Just listen to the flourishing statements of these companies that I have taken from Moody's Industrials, 1951, to be found in the library. I will not give the figures in hundreds. I will just give the thousands and the millions:
Burns & Co. Ltd.
Net Profit from 1943 to Dec. 31, 1950
1943		 $ 340,000
1944		 316,000
1945		 297,000
1946		 472,000
1947		 516,000
1948		 1,107,000
1949		 1,180,000
1950		 1,079,000
British Columbia Packers Ltd.
Net Income from 1943 to April 30, 1951
1943		 $ 308,000
1944		 281,000
1945		 354,000
1946		 504,000
1947		 644,000
1948		 1,578,000
1949		 995,000
1950		 1,078,000
Then we have Canada Packers, which is a large company. I will not go over the whole list this time because the figures all have a trend to go up. In 1949, the net earnings of Canada Packers were $2,807,000; in 1950, $2,080,000; and in 1951, $4,126,000, and that is after they have allowed $1 million as an inventory reserve for 1951. If any hon. gentleman would like to look up the report

of Canada Packers that we received in the mail a few days ago he will find that the auditors have this to say:
Included in the current liabilities are provisions and reserves which in our opinion are, in the aggregate, some $2,750,000 in excess of the actual liabilities.
They have laid that money by, and they do not really need to do so. But still their net earnings, after that amount is taken off, are over $4 million. At the same time, to be fair to the company, in the report they claim that they handle meat for a quarter of a cent per pound or 24-4 cents per hundred pounds. That does not seem to be much; but when you realize that beef prices have risen 178 per cent since 1945, you can realize why they are making more money all the time. Meat consumption has declined since 1943, when it was highest and reached a peak of 155-5 pounds per capita. In 1950, it went away down to 134-1 pounds per capita.
The Prime Minister also had something to say about the price of beef; sirloin, I think, was the example he used. I have in my hand here an editorial from the Ottawa Evening Citizen. I am not going to read the whole thing. The only part that really interested me, which I think is good, is contained in the last few lines; and I am going to put that part on record. I might say that the editorial is entitled "Comparing Prices Doesn't Mean Much", and the last two paragraphs read as follows:
The fact remains that, irrespective of what is happening in the United States, the burden of food prices and of many other things ranking as necessities or conveniences has become oppressive in the experience of a large segment of Canadians. Mr. St. Laurent prefers to swing the emphasis the other way. He says: "There is no doubt that certain sectors of our population are feeling some hardship, but not all sectors of our population."
This is undoubtedly true. The top end of the income scale is not feeling the pinch, nor a large part of the intermediate groups. Some wage earners may be counted among the relatively well to do. But others certainly are not: nor are thousands of clerks and other office workers-including government employees-to whom a rise of a point in the cost of living index is a matter of increasing gravity.
The people last mentioned in the editorial are those who are feeling the pinch; that is, all the people in the lower income brackets. To stick to meat, that is the housewife's greatest headache today. I do not doubt the Prime Minister's figures in any way, but I want to use them to show what is taking place in the packing industry at this time. When you look at your paper, you will note that there are many different classes and types of cattle being sold. You have choice steers, common steers, medium light steers, good heifers, medium cows, common cows, common bulls, heavy bulls, choice fed yearlings.
The Address-Mr. Bryce medium stockers, grassers, cutters and can-ners. That may be Gaelic to most hon. members in this house, but I know what I am talking about because I can go to the yards and pick out these different animals if I have the opportunity to do so. These animals are priced from approximately $36 or $37 a hundredweight for the top grades down to $18. When the animals come to the butcher's plate, they have no reference to what they have been.


An hon. Member:: There is no class distinction.


William Scottie Bryce: No, there is no class distinction. The class distinction is only when the farmers sell and the packers buy. While there are apparently many classes of cattle in the stockyard sales, why is it that only one class of meat appears on the retail meat counters? Does one of these common cows become a choice heifer by passing through a packing plant? Choice cuts are marked "red" and "blue" beef; but the lower grades of meat are never identified in any way. The cuts range in excellence something like this: tenderloin, sirloin, porterhouse, T-bone, round steak, flank, shank, chuck, brisket, heart, tongue, liver, kidneys, oxtail, hamburger and tripe. I was raised in Glasgow, Scotland, Mr. Speaker, in a low-income home. My mother was an excellent housekeeper. She kept us well fed and nourished with dishes such as Irish stew, boiled brisket, stuffed heart and other lower grades of meat. We were not in the habit of getting tenderloin, sirloin, and so forth. Too often today when I am in a store I see some women forced by economic conditions to buy bologna and ask that it be sliced thin. Then they wind up by buying macaroni and potatoes that will fill empty stomachs.
The wife of the man who is earning $100 a week buys sirloin steak. When she goes into the store she no doubt will ask for three pounds of sirloin steak, and, according to the Prime Minister's figures, she will pay $3.15 for that meat. The next lady who comes in may be the wife of somebody who is earning $35 a week. She asks for three pounds of stewing beef, and she pays $2.65 for that meat, or perhaps a little more. It is quite evident to me that the packers have juggled prices in such a way as to force all parts of a carcass to move up evenly, and in doing so *they have forced the low-income people, the people who are earning $35 or $40 a week, to subsidize the people who are earning $100 a week. That is a pretty strong statement, but if any hon. gentleman has some time at his disposal I can prove it to him. The low income bracket people today are subsidizing the people who are buying the higher priced and better cuts of meat, because those cuts
170

The Address-Mr. J. A. MacLean have been reduced. If sirloin steak is worth $1.05 a pound then brisket should cost only 40 cents a pound. It should not be 65 cents a pound.
I hope I have made it clear to some of my hon. friends what is taking place in the meat business today. I think it is a disgrace that that sort of thing should go on. The lower income bracket purchaser is buying the lower grades of meat and subsidizing the person who is buying the better cuts of meat. The packing companies today have no more competition. If you take some of the inquiries we have had in the house you will find that out. There is no competition whatever. They set their own prices; they make their own arrangements, and they do what they please. I hope the Minister of Justice (Mr. Garson), who is not here today, will have an investigation made into the packers and how they sell the meat, in fact into the whole meat business, because obviously there is inequality amongst our people, and so long as there is inequality there is injustice.


Mr. J. A. MacLean (Queens):: Mr. Speaker, to begin with I should like to join with a number of hon. members who have already spoken in this debate in congratulating the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne on the excellent presentation of the motion. I tender my congratulations especially because I know they were their maiden speeches, and I know now by experience that it is not without some misgivings that a new member in this house rises to make his maiden speech. That is exactly what I am doing now.
I am one of the four most junior members in this house, and therefore I am under certain disadvantages. It is clear by this time, I expect, that I have absolutely no experience in parliamentary debate. On the other hand, we who are the four most junior members in this chamber have certain advantages which for the present at least are denied all other hon. members. We have an up to date knowledge of what the people whom we represent think of the present government. On that account I feel not only privileged but obligated to express the opinion of the people whom I represent.
I am honoured by the fact that the people of Queens county have elected me to this House of Commons; but I feel also that they have given me a great responsibility. It is a responsibility that is not lightened by the fact that I have been sent here to fill the vacancy created by the death of the former member who represented Queens county for some twelve years, a man who was a capable parliamentarian and one of nature's real gentlemen. In that regard I feel that in one small
(Mr. Bryce.]
way I have a dual responsibility, because in one connection at least I am here to fill the vacancy which was created by the death of the late member for Brandon. He too was a native of my constituency.
The speech from the throne mentioned the pleasure which the Canadian people are experiencing at this time in welcoming Princess Elizabeth and the Duke of Edinburgh to this country, and also the pleasure the Canadian people have in the knowledge that the health of His Majesty the King is improving, i may say that nowhere in the country are these pleasures more valid than in Prince Edward Island.
The speech from the throne also stated that the chief reason for calling this special session of parliament was to find means of raising funds to make it possible to pay old age pensions without a means test to all citizen; with the required qualification of beini seventy years of age or over. That is a pro gram with which I am in complete accord with this qualification; I feel the people of mj constituency are convinced that every effor should be made to raise these funds from present surpluses and by economies which the government may make.
Another point which was dealt with in the speech from the throne was the development of the St. Lawrence seaway. It was pointed out that this was an important development in the economy of our country; that it will provide cheap electric power for a large section, and also improve the navigation of the St. Lawrence waterway. With that I agree, but I do not agree with the priority which has been accorded this project. I say it is high time the people of Canada and the government of our country gave consideration to the dispersal of industry so there would not be the concentration now existing in the two central provinces. This could be brought about by developments in the far-flung corners of our country.
One project that should have priority over the St. Lawrence waterways would be the Passamaquoddy power project, an international project between Maine and New Brunswick. This would provide cheap electric power for a depressed area, namely the maritimes. It would create an opportunity to disperse some of the concentrated industry found in central Canada and locate it in these depressed areas where a surplus of labour is available. This dispersal of industry should be carried on for various reasons, the most important of which is that of defence. The argument will be offered that the reverse is true, that we should concentrate our vital industries in a small area and put a radar screen round them with perhaps three fighter

squadrons to protect them. Perhaps one would be at Bagotville, one at Uplands and one at North Bay.
To my mind that argument is not valid. After all, there was a concentration of heavy industries in the Ruhr valley. The German luftwaffe had far more than three squadrons at their disposal, but with all that they were unable to put up an adequate defence. In my view our only hope of preventing the destruction of our industries from the air is to disperse those industries. In that connection I would remind hon. members that there have been tremendous technical advances in aeronautics in the last twelve years. It is now just as feasible for our only potential enemy to bomb Montreal or Toronto as it was for the R.A.F. to bomb Berlin in 1939. When we look at the conventional map we are apt to forget that there is nothing but a small sea between us and our only potential enemy. It is enlightening to have a look at a globe, or a map with polar projections, to make us realize that the shortest distance from the communist sphere of influence to the United States is across our territory. It would be unfortunate if most of our key industries and a large percentage of our population were wiped out by a couple of atomic bombs perhaps intended for New York or Washington, but dropped on Montreal or Toronto as alternative targets necessitated by weather conditions or better defences at the original targets.
In that connection I would remind hon. members that when the last war began the bomb load of the aircraft of that day was the equivalent of about one ton of TNT. The bomb load of the present-day aircraft carrying a modern bomb is the equivalent of about
50,000	tons of TNT. Conditions have changed; we must remember that.
There are those who would say that I am an alarmist. I do not think that is true. I would hope at any rate that I am a realist. I am not satisfied and I say the people of Canada are not satisfied that the government has taken sufficient steps to protect our country either by way of military defences or home defence. It is an impossibility to bring our vital industries into one small area for purposes of protecting them, even if it could be done, or if they could be protected. After all, we cannot bring into one small area in this part of the country the aluminum development of British Columbia, the oil wells of Alberta and the iron development of Labrador. There may be some who would like it to be possible, but the fact remains that it cannot be done.
Therefore I suggest that we must be prepared to disperse our industries and to build 94699-121
The Address-Mr. J. A. MacLean shadow factories in respect of certain key industries such as the production of aeroplanes and aircraft engines. There are other incidental benefits which would accrue from the dispersal of our industries. One of these is that it would relieve the congestion connected with the housing problem in some of our largest centres. I am not saying for one moment that by a dispersal of industry the housing problems of Toronto or Montreal, or various other centres, would be solved. I do say, however, that those problems would be relieved.
In my constituency we have a housing problem, too, but it is not the kind of problem one usually hears described. It is altogether different because a large percentage of the houses in the rural area of my constituency are unoccupied. I maintain that if industry were brought to the outlying sections of our country the economy of the country would be improved, as would the social life in those areas. I would say too that children brought up in small towns and villages and in the country have an advantage over those brought up in the larger cities, who must live among the flashing lights and the ringing bells. The child of the modern city must feel something like a ball in a pinball machine. On the other hand a child living in the country either consciously or unconsciously comes to recognize that he is part of God's creation, a fact that stands him in good stead in later years.
Since coming here I have been greatly impressed by the beautiful architecture of this building and by some of the memorial tablets. I noticed one, however, which has an unhappy story behind it. It is a memorial to commemorate sixty years of confederation, bearing the notation that it was donated by Canadians living in the United States. It is a sorry fact that, particularly in that part of Canada from which I come, namely the maritime provinces, ever since confederation there has been a constant flow of the best of our population to the United States. This has taken place simply because our economy has been such that it could not look after the natural increase in population. I agree fully that we should have a program of immigration; but before we start that let us create conditions in our own country which will take care of our natural increase. It may astonish hon. members, as it did me, to learn that a few years ago there were more people of Prince Edward Island stock living in the United States than in Prince Edward Island. My province is the only one the population of which at the present time is smaller than it was in 1890.

The Address-Mr. J. A. MacLean
We in Prince Edward Island, and indeed the people from the maritime provinces generally, have been accused of complaining constantly and of wanting something for nothing. I think we have been justified. In my constituency, even in such small matters as public works, we seem not to have been given fair treatment. For two elections now we have been promised public works. We were told we were going to have a new federal building in Charlottetown, that we would have naval barracks and possibly a new drill hall, and that contracts were going to be let in the area for the repair of small naval vessels. None of these things have materialized.
A few weeks ago a litter of pigs were born on my farm, and as is usually the case there was one runt. In the crucial few days of their lives when the struggle for survival is very keen it was easy to observe that the runt was getting pushed around badly. My hired man was looking at the litter and he said, "I notice every time the underdeveloped pig attempts to improve his position he is pushed around and ends up trying to gain nourishment from a mammary gland which is not functioning." Those were not his exact words but that was the general meaning. Every time I think of that, I think of Prince Edward Island. We are the little fellow at the far end of the Canadian table and little meat let alone gravy ever reaches us. That condition should not be allowed to continue. The government of this nation should be above petty provincialism and should treat all sections of the country in the same way.
A great deal has been said in this debate about the high cost of living. I must admit that the small knowledge of economics which I acquired at university now seems to be badly confused. There has been a great deal of talk about too many dollars being in hot pursuit of too few goods. To me that seems to be completely out of character, especially In Ottawa. If that condition exists in the rest of the country I would say that here in Ottawa we might have a situation where too many goods are flirting discreetly with not enough dollars. This problem of inflation is facing the western world at the present time. We have two commitments today where in the past we had only one. We must try to safeguard our standard of living on the one hand, and we must try to protect ourselves in a military sense against destruction by our enemies on the other. We are in the position where we must have our cake and eat it too. What goes for defence cannot be used to raise our standard of living.
IMr. MacLean (Queens).]
COMMONS	[DOT]
The only way we can do both is to increase our production. We must make two cakes if we are going to have one and eat one.
I maintain that if our economy is to be placed in a strait-jacket, if we are to have complete rationing and complete artificial control of prices without increased production, in the end we will not be any better off. But I do realize that at a time when large numbers of our people are in desperate straits due to the high cost of living there is a great temptation to jump from the frying pan into the fire. There is a great temptation to allow ourselves to be led over the precipice into the abyss of a totalitarian state. I hope that will not happen.
But there is an even greater responsibility facing the present government; it is to see that our free economy is allowed to function in the way it was intended to function, to see that there is competition, and that certain profiteers and racketeers of other sorts are not allowed to sabotage our economy, or allow our free enterprise and our very way of life to fall into disrepute even among our own people. After all it is the free economy that we subscribe to that has made us what we are as a nation. I feel that the problem of inflation can be solved. I think this country would be doing its share to curb inflation in the western world if it did three things. First I would suggest that the tax burden be removed from the shoulders of those in the lower income tax brackets. A large number of the people in this country, such as people on fixed incomes, are in the position that they cannot make ends meet. My good friend and former comrade, the hon. member for Coast-Capilano (Mr. Sinclair) has pointed out that travel in foreign countries helps one to understand his own country. I agree with him because I also have had that privilege. But I would point out to hon. members that travel in this country is also helpful. I have done a lot of travelling in the last year. I have not travelled extensively but I have travelled intensively and have talked to thousands of people in the constituency I represent. They have not experienced the problem of having more money than they know what to do with intelligently. I feel that this is one way in which the problem of inflation could be resolved.
Another way would be to Strengthen the anti-combine and anti-cartel legislation of this country, and above all enforce it. A third way in which inflation could be relieved would be to peg prices where the	balance of the
economy has been artificially disturbed by the allotment by the government of certain key materials to defence purposes. If you

are going to artificially upset the balance of the economy by allotting in an arbitrary way materials to certain industry, you must also fix the prices on those materials. If you do not you are going to keep certain supplies away from a given market and you will thereby create a profiteer's paradise. Everyone knows that when a balloon comes to earth and you wish to unload it, the first thing you must do is moor it. If you take away part of its load, when you go back for the rest you will find that the balloon has risen out of reach. That is the sort of thing that is happening to our raw materials. If a large amount of them are going to be removed from the market the price of those commodities should be moored so they will be within reach of ordinary industry.
A lot of people may say that I am an alarmist, or perhaps even a Jeremiah. I do not know, but I certainly do feel that the situation is critical. I feel that western civilization is fighting for its very existence at this moment, both in a military and economic sense. In that regard I should like to point out the lesson history teaches us, that almost without exception every great civilization of the past perished not because it was destroyed by attack from without but because it rotted from within. We must not neglect the defence of our way of life on the home front. Some of you will say that such a thing is an impossibility, that these things do not happen any more, that civilizations do not collapse any more, but that is not the case.
I once had the privilege of going through and examining the Roman baths at Bath, England. I saw there a most impressive place where a very high standard of civilization existed in what must have seemed a very secure world. I doubt very much if the Roman officials who lounged in those baths would have believed that 200 years later waterfowl would be hatching their young in the reeds in that location. That is what history tells us happened. If we are not careful there is at least the possibility that our way of life and our civilization will be destroyed because there are great and powerful forces at work to that end in the world today.
I think the members of this house have two alternatives before them at the present time. The first is, when the amendment is voted upon, to express the opinion of the people they represent, and I think that is what the people want them to do. If they follow the dictates of their consciences that is what they will do. The people I represent look upon the House of Commons as a dog in one sense and they look upon the government as the tail. They are absolutely fed
The Address-Mr. Ferrie up with watching the tail wag the dog. In that connection, by way of reassurance to the dog and warning to the tail, my experience is that if the occasion requires it and the one is severed from the other the dog usually survives but the tail never does. Therefore I would recommend to members of this house that when they are required to consider how they will vote they should follow the dictates of their consciences and vote as the people they represent expect them to vote. If they do that, I feel confident that they will support the amendment moved by the leader of the opposition (Mr. Drew) and seconded by the hon. member for Lake Centre (Mr. Diefenbaker).


Mr. G. M. Ferrie (Mackenzie):: Mr. Speaker, in rising to take part in this debate I wish to say that I was most pleased with the words of the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne with respect to our northern and western country. The mover made a statement about a matter that has been worrying us for quite a long time. He was very anxious that the South Saskatchewan river development project should be proceeded with. We believe with him that the St. Lawrence waterway should be deepened, and if we cannot secure the co-operation of the United States we are willing to back the people of eastern Canada in the finishing of that project. We of western Canada are satisfied that the St. Lawrence waterway will be of great benefit to us.
I also wish to congratulate the seconder. He is one of the men from that great north country. Like mine his constituency touches on the Arctic. My constituency is over 500 miles long and 70 miles wide. North of Flin Flon is one of the paradises that have never been touched or even thought of from the point of view of development. I am not going to say very much about the cost of living but I want to say a few words with respect to production. Our great north country is open for production. As the seconder said, it is full of minerals awaiting development. One part of it is available for the development of agriculture. South of Cumberland House, between the Saskatchewan river and the Carrot river and between the Saskatchewan river and the Pas river there are around four million acres of some of the best land in Canada, but it needs draining and development. I am not going to go into that matter at this time. No doubt you will hear from me later with respect to it.
You have heard about the movement from Sherridon to Lynn Lake. That is a step in the right direction. We need that railroad, but it should go farther. We need a railroad
174	HOUSE OF
The Address-Mr. Ferrie to go north to Reindeer lake and on to Athabaska. As Maclean's magazine said, the hottest mile in the world is in the north country around Uranium city. Then the railway should go from Uranium to Fort Smith and from Fort Smith down to Prince George. That is something we in the north country want. Whether we will be able to sell the idea to eastern Canada in our lifetime we do not know, but we hope it will be done. It is very hard to get the people of the more populated areas of eastern Canada to realize exactly what the great north country is and can be to the people of Canada.
I want to bring to the attention of the house one other point with respect to our north country. We have there a river quite similar to the St. Lawrence. The St. Lawrence runs from one small lake to the other. It has rapids and everything to make it a real source of power. We have the same thing in the Churchill river. That is why I say the people of Manitoba need have no worry with regard to the loss of water in the South Saskatchewan for irrigation purposes. If one studies the map one can see that at one place called Frog Narrows the Churchill river, at high water, flows down into the Saskatchewan river. This whole water system of the north can be controlled, and not at great expense. It is a river that has some power development on it.
In my constituency I have a place called Island Falls. It is a small village which was established by the Hudson Bay Mining and Smelting Company. It has all the facilities of a great city. There are cement sidewalks, a water system, a dance hall, picture shows and a library. The people enjoy all the things that are necessary for good living, but they do not have a road. The only road they have is over the ice in winter, and they use boats in the summer. They live in one of the finest places you could wish to see. They have their boats, fishing and hunting lodges, but they are 90 miles from civilization.
When this power development was established, all the material was taken up over the ice by caterpillar tractor. There is an airplane service to the outside world which carries mail and other necessities once a day. That is only a small part of what is going on up in our north country. I want to say that we in the Flin Flon area have, in the last ten years, produced $80 million in taxes out of that stone and rock. Yet the 12,000 people in that city cannot drive westward out of the city but have to go 300 miles to the east before they can leave that area. This should not be allowed to happen to
12,000	people who are creating wealth for Canada.


In discussing the north country, I should like to say that a power development at Frog Rapids on the Churchill river could do a wonderful job because it could control the waters right down to Lake Winnipeg. This is not something that is imaginary, that has not been surveyed. It is a possibility; something that can be done. The water can be controlled at these rapids and brought down the Saskatchewan by means of this project Manitoba is talking about, to the Dauphin river, then into Lake Winnipeg and back out by means of the Nelson river.
In this area we have a falls which has a great flow of water called Whitemud falls. There is a good site there for a power development. When I tell you that about
86,000	cubic feet per second flow over these falls you will realize that there is plenty of water. Near where this power could be developed in the Nelson and Churchill rivers there is a growth of black spruce averaging ten to eighteen feet in height. These trees will never grow any taller. In this stand are millions and millions of cords of pulpwood waiting to be taken, but we want to preserve the second growth. In my opinion this is a proposition for the federal government. No independent organization could make money out of it, but it is a product that we need. It is a product that could be salvaged instead of being burned up. Canada needs that pulpwood, and so does Britain. If the power were developed this wood could be processed there and shipped out through the port of Churchill to the places in Europe where it is needed. If the pulpwood were not turned into paper in Canada, it could be shipped in its raw state to the countries of the world that need it. It is a development that could supply employment for the people up there. We have a large number of Indians and Metis up there who could be usefully employed in such industries. It would also provide business for the port of Churchill. I believe we need some of the people from eastern Canada to go up and see that glorious north country, so that some of these developments could take place in our lifetime.
I am now going to bring to the attention of the house something that is extremely serious in the minds of the people of my constituency, the people of western Manitoba, and the people in the eastern part of Saskatchewan. In the last year or two we have had developed something that can take the very life blood not only out of those provinces but out of all Canada; it is this form of rust called 15B that attacks the wheat. As some hon. members will recall, back in 1935 and 1936-or you can go back to 1927-rust took millions and millions of bushels of grain and left many people in dire circumstances

through no fault of their own. For a long time we figured that we had this rust beaten. We figured that we had rust-resistant wheats such as Thatcher, which was the outstanding variety. We figured that it was our redemption, and that we were O.K. But now we have come up against another one. That other rust spore is here and we must defeat it. In all earnestness I ask that no expense be spared in an effort to defeat this rust in the near future. We in western Canada are afraid of what this rust will do in the coming year. If this 15B spore tackles us in the way it did in 1935 and 1936 you will not only have many bad years in eastern Canada, but you will also feel that there is little that can be taken from western Canada to support the great industries of the east. That will be the situation if this wheat disease catches us as it did in the past.
I should like to say a few words with regard to a matter about which I spoke when I first came down here. We in western Canada need a defence highway from Edmonton to Winnipeg. That highway should be built by the dominion government or by the Department of National Defence so that, if things come to the worst and we must have a war, we in western Canada will have a chance to get out or the implements of war will have a road on which to travel in. One thing is sure; that is something which is not now in existence. We have not a highway west of Winnipeg that would take tanks and trucks if we had to defend our north country. It is high time the defence department realized that it is impossible to defend a country as large as this without having a good solid highway from Winnipeg to Edmonton.
I want to say just a few words with regard to what I think about the requested increase in the pension for our war veterans. I am a war veteran myself. I am not a pensioner but I have had a good deal to do with pensioners. For thirteen years I was president of our Legion branch, and I know the difficulties we have had in trying to get pensions for men of the first great war. For men of the second war it was not so bad, for the simple reason that the old fellows of the first war had something to do with creating in the country a better feeling for those who came back from the second war.
I am satisfied that it is high time our pension legislation and war veterans legislation had an overhauling. I hope that before this session is over the government will tell us something about what is going to happen to our veterans who are on pension. Some of them are suffering badly right now. They are having a hard time to get along. That is true more especially of those veterans about the age of 50 to 60, or who are not 60,
The Address-Mr. J. M. Macdonnell and who cannot get anything extra to help them along in these times when the cost of everything is so much higher than was ever anticipated when the pension was given to them. I hope the government will see its way clear to render some service to the pensioners of Canada who did so much for us in the last two wars.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, before proceeding to the remarks I wish to make, I should like to associate myself with those others who have praised the mover and the seconder of the address in reply, and this I do with great good wilL I hope we shall hear from them often in the future.
I had prepared certain remarks, but before making them I think I should permit myself one or two comments on the interesting speech we had from the parliamentary assistant to the Minister of Finance. I always like to hear the parliamentary assistant. He is always good. He is always very sure of what he is saying. He is always very happy about everything. Today he seemed happier than ever, Mr. Speaker. I only wish that all the people in Canada who think they are badly off could have been here to hear him. I think they would have pinched themselves and said:	surely there cannot be anything
wrong. Surely these troubles we think we have are all imaginary, because the parliamentary assistant has told us that everything is O.K.
I noticed that there was just this one catch. The parliamentary assistant is an economist. Now, economists think in long terms. I am just an ordinary guy who tries to pick up bits and pieces of economics, and fit them in with common sense. I have to think in terms of months or perhaps a year or two years, but the economist can take the long-term view. He does not have to worry about what happens in the interval so long as it is going to be all right in five years, ten years or fifteen years. It reminds me of an incident that happened to Principal Wallace at Queen's university. That is a small university in eastern Ontario. Dr. Wallace was a geologist in Manitoba. He was speaking to those who were unfortunate enough to be incarcerated in the penitentiary. He was talking to them about geology. He had been talking about the Churchill river that we have been hearing about, and explained the changes that had taken place thousands of years ago. He said: "To the geologist a thousand years is like one day." One of the inmates of the penitentiary was put up to thank him. He said he was very glad that

The Address-Mr. J. M. Macdonnell the judge that sentenced him was not a geologist if to him a thousand years was just like one day.
Of course I am not suggesting that the parliamentary assistant to the minister was speaking in terms such as those, but it seems to me that he was just a little vague as to those wonderful things this wonderful government was preparing for us; just a little vague as to when they were going to come.
I am very grateful to him for one thing. He really made one important point for me. In my humble way I was going to try to show that one of the great difficulties with which we are faced today is that there is too much money, when lo and behold the parliamentary assistant spoke right up and said: that is the trouble. He says we have plenty of goods, and he may be right in that, but that we have too much money. I only wish that some of the people who have not enough money, as the hon. member for Queens (Mr. MacLean) has already said, could have been here today. I only wish that some of them could have been making this speech instead of me, because I think they would be able to say to the parliamentary assistant: I would like to see some of this superabundant supply of money. The parliamentary assistant talks about the supply of goods being good, but it is of no help to a person who has not this superabundant supply of money.
I was interested not only in what the parliamentary assistant said but in what he did not say. There were very interesting things that he skipped over. We had an interesting description of what went on during the war. I think he was quite sound on that. And then he said a word or two on what happened just after the war; and I think he was quite sound on that. Then the next thing we knew we were at Korea. He just jumped over the intervening years and we were in Korea. Nothing was said about the fact that the cost of living went up 20 points between 1947 and 1948 when we were living in what should have been normal times. Nothing at all was said about that. We skipped right down to 1950.


Mr. Abbott:: The cost of living levelled off between then and Korea.


James MacKerras Macdonnell: I intend to have something to say about Korea later, but I will not dwell on that now. I should like to reiterate what I said, and I say this for the benefit of the minister who has just come in. I think the parliamentary assistant was right in saying there was too much money. I was glad he helped me on that, because I proposed to state that old story again very briefly this afternoon. We have
[Mr. Macdonnell (Greenwood) .1

told it so often, and now that the parliamentary assistant, who I think plays a part in the Department of Finance, is of that opinion I hope something may come of it. We in our humble way have not made very much progress in getting it across to the government.
By the way, I do realize in a vague way the point the parliamentary assistant made, that we must not talk about inflation and prices as if they were the same. I realize they are not the same thing. On the other hand I believe no less a paper than the London Economist, which he quoted and which I shall quote later on, and which the parliamentary assistant said was a reputable paper, pointed out the distinction very clearly, just as the parliamentary assistant did; but they went on to say that ordinary, simple people regard them both as the same, and that they were going to talk about them in that way. Having explained that I am just one of those simple souls myself, I am going to talk about them in that way, and perhaps the parliamentary assistant will overlook my innocence in these matters and will not insist on making the distinction which I think people in the higher ranks of economists do, which gives them great pleasure but does not do much to comfort the ordinary person.
My only excuse for taking the time of the house this afternoon on this question of inflation is that I think it is a terrible danger. I am going to argue this afternoon that neither the government nor ourselves-I am not going to put all the blame on the government-neither the government nor the citizens of the country, at any rate those citizens of the country who are in a position to do something about it, seem really to regard it as a very great danger. Sometimes I wonder whether we are not like children playing in the sand. In a tepid way we say that inflation is a bad thing; but Mr. Speaker, do our actions correspond? It seems to me that our plan of action in the country at the moment is "every man for himself and the devil take the hindmost". All I have to say is if that is true, and if we are going along like that, I think the devil will not only take the hindmost but he will take us all.
I am not going to try to hang it all on the government. I think the government has made great mistakes. I shall try to point that out; nevertheless we are not going to settle this at all if citizens are not selfstarters or if somehow or other the government does not give us the lead so that we are able to do necessary things. I hope that I shall not speak extravagantly or irresponsibly, but I do feel that we have not wakened up to this thing, or at least very few of us

have, and I propose to try to indicate just where the government has failed and where we have failed ourselves.
Our talk about inflation always deals with our own troubles from day to day; the cost of this and that, the cost of utensils, the cost of food and other things. Of course we all hope the government will do something about it. I was very touched by the remarks of the hon. member for Fort William (Mr. Mclvor) the other day. In the few years I have been in the house I have never seen a member of the government who has been so touchingly loyal to the ministry as the hon. member. He always tries to come to their assistance, sometimes when they need it and sometimes perhaps when it would have been better if he had left them alone. But I was very touched the other day because he said he was "patiently waiting". What a Christian spirit. I suppose he would argue that the rest of us also must just patiently wait too in the hope that some day far off at last something will be done.
I want to digress for a moment because while we must not overlook the serious condition at home, I want to speak about the broader implications of inflation on this continent. I suppose it is true to say that the situation in North America is having a tremendously important and deleterious effect on western Europe, and in a sense is endangering the defence program. I notice that the London Economist says that Britain is now facing a third economic crisis since the war. It is not nice to think that they have to face another crisis after having faced two, but there are the words of a sober publication. Therefore I ask, are we in Canada really alive, do we really want to stop inflation? When I say "we" of course I mean everybody, and when I say "wish" I mean not only wish, but are we prepared to take the measures necessary to do it, even though it may, involve some personal discomfort to ourselves? I very much doubt whether we are, in any broad sense. There seems to be no doubt that a considerable number of people think they can beat inflation. We can hardly expect those who are in that position, those who feel they are protected, to feel as keenly about inflation as do the rest of us. I think if they had been here this afternoon and heard the parliamentary assistant they would have said, "Oh, this is all right. What we are doing is right. There is no objection to it. It will work out all right-some years from now." I do not think anything that was said by the parliamentary assistant would give one minute's check to people who, as I say, think they can beat it.
There is a widespread belief that we have a kind of divine immunity from the real
The Address-Mr. J. M. Macdonnell effects of inflation. There seem to be people who believe it will just jog along gently and never get painful. It might make things a little uncomfortable, but there never will be any real danger. I believe that is not an uncommon view in this country; and I believe, too, that it is a profoundly wrong view.
I shall quote later from The Economist to show the terrible effects inflation can bring; and I shall indicate that the inflation which is now, I think we may admit, on the trot, could easily develop into a gallop.
I shall digress for a moment to quote from a profession which, after all, has a great stake in protecting the value of money. The sad thing is that those who have commodities to sell have not the same interest in protecting the value of money as have those who like the insurance companies are dealing with money itself.
I should like to quote briefly from a speech made the other day in Toronto by the head of the Prudential Insurance Company of America. He asked three entirely relevant questions. Perhaps they are obvious, but I suggest they are also relevant. He asked: (1) Are the potential dangers of inflation fully understood by most people; not just the mass of the people, but by people in responsible position? (2) Has enough been done to counteract the forces of inflation, or to remove its causes? (3) If not, what else can be done, and by whom?
Then I wish to read briefly from his speech, because he sets out very clearly those people who are suffering most. He says:
To what extent is inflation really understood by the people who might do something about it? Although some groups in the economy do not seem to realize how disastrous inflation can be, many groups have already experienced the destructive effects of inflation. Fixed-income families, pensioners, civil service workers, people living on the proceeds of life insurance or interest on investments -and in this last category are hundreds of thousands of widows in addition to the people customarily regarded as rich.
I mention this because there you have the people who know the score now. They know what is happening, and they are in a very poor position to protect themselves. It is rather interesting to see that this insurance man sets out the problem very clearly, just as I would have set it out myself. He says the problem is "to reduce the active money supply in the hands of the public. It is the active money supply which does the mischief".
Then he has a word to say about taxation. I shall quote him, and one or two others. He said that he used to favour taxes as a corrective, but that he has now changed that view "because the government in Washington
178	HOUSE OF
The Address-Mr. J. M. Macdonnell has made little or no effort to reduce nonessential spending". Then he points out very strongly-and I agree with him just as strongly-that the business community has got to get together and work on this problem.
I have quoted this American authority. He has said that it is the active money supply which does the mischief, and I have agreed with him. That is an old story in this House of Commons. We have tried to get it across again and again; but it is never a dead story, because the evil influence is still with us. You will remember the main figures: spendable income since 1939, up about four times; goods and services, up about twice. You will remember also, since it has often been said here, that at the end of the war, in 1945, the government produced a memorandum, commonly called a white paper, which was intended to deal with the depressed condition they expected, and which they went on using for years to fan a boom.
It is necessary to mention this because one thing that one ought to say frankly is that the government propaganda machine is very good. They are very skilful in obscuring what they themselves have done. One hears inflation talked about as if it were like a flood or a plague, or a foreign invasion, something that came in from the outside and with which they had nothing to do. Sometimes when conditions suit them they will say it is an import from the United States and something about which we cannot do anything; that it just flows over. Sometimes we are told it comes to us from the world at large. But never, oh, never, is it our own fault!
How are they going to cure anything until they admit the fault? No man ever gives up sin until he first repents. I could see no sign of repentance this afternoon. On the contrary we were informed that everything was perfectly all right.
Now, a word about the government's record, first of all before Korea, and then after Korea. I have in the past covered the first period, the constant devices to stimulate capital expenditure, such as double depreciation. As I have said before, what we needed was a sedative and what we got was a tonic. And that was the reason, or at least one of them-perhaps the main one-that in those quiet years, years which were almost inconceivably quiet as we look back upon them now, from 1947 to 1948, the cost of living went up 20 points.
I would remind the government that their friend, the Free Press, called this use of depression devices in boom time the "big blunder". The Hamilton Spectator used even more spirited language and referred to "the disastrous holiday-mood easy money era


which found politicians and economic pressure groups doing everything in their power to make inflation a permanent institution".
This policy was still in flower when Korea came along. And just to remind the house, the cost of living index which was at 161 in January of 1950 was at 169 by September. It was going up, and it kept on going up. One would have expected vigorous action when the house met in September of 1950. But no; the government was uncertain and lethargic.
We gave them the answers. It almost embarrasses modest people like ourselves to realize how right we were. We told them all the answers then, but of course they could not accept them from us. Then there was a favourable turn of things in Korea, and they seemed to think they were off the hook, with the result that they did virtually nothing. There was a feeble gesture with regard to instalment buying, which was virtually useless. The Minister of Defence Production (Mr. Howe) indicated what seemed to us a sensible course when he said:
If for war purposes we shorten the supply of materials and the remainder is insufficient for domestic supplies, we then take the right to fix prices on materials for domestic use and distribution.
And that is just what the hon. member for Queens (Mr. MacLean) suggested this afternoon. But that was in September of 1950. What do we find on February 8, 1951? Has the Minister of Defence Production done anything about it? Here are his words:
Up to the present, defence purchases have not been of sufficient volume to be in themselves responsible for shortages.
We found this very unconvincing. I would like to know what the minister has done up to the present time, and whether he is satisfied with commodity prices as they are today. We are justified in asking the minister to give us an account of his stewardship.
Then the government will ask us: "What about tax measures? Did we not put in taxes? Are they not deflationary?" Well, sometimes an overdose of medicine is worse than no medicine at all. I have already told the house about Mr. Shanks, the president of the Prudential Insurance Company of America, and how he had a change of heart toward taxes because of the failure of the government in the United States to reduce expenditures. I should like to quote other authorities with regard to this easy, doctrinaire theory that all you have to do is raise taxes. It does not take much intelligence to do that. I notice that the parliamentary assistant quoted The Economist this afternoon as if they had put their imprimatur on it, but common sense should be applied. You just

cannot take a theory of that kind and give the full bottle of medicine where perhaps only a spoonful is needed. On October 13, The Economist said:
There is a point beyond which a nation cannot tax itself without making inflation inevitable.
We cannot argue at the moment whether that has happened. I am suspicious of the easy theory that all you have to do is to raise taxes, especially when they are applied without the admixture of what a leader of this party once called "immortal common sense." I should like to call as an authority a person who ranks quite high in the confidence of the government, Mr. Walter Gordon, one of the most highly regarded businessmen in this part of the world. Speaking of corporation taxes he said:
It may be well to remind ourselves that corporation taxes do not come under the heading of antiinflationary measures ... we should not pretend that this type of tax will help to solve the problem of inflation.
Do not let us run away with this easy theory about taxation and just apply it as an answer to everything. I want to refer again to what we in our humble way said about taxes last April. When we were asking the government to take off the sales tax we said that if prices rose, revenue would follow. It did not take much foresight to see that.
Anyone could see it. What happened was just what we predicted. The minister imposed increased taxes which increased revenue; with the higher taxes we got a surplus. We all remember how the minister some years ago referred to a surplus as being something to gladden the heart of the minister. That was two or three years ago, but I wonder whether the minister still has his heart gladdened by the surplus. It is true that he still points out that part of it is due to higher prices, but I never hear the slightest sound of regret in his voice. I sometimes wonder whether he is not feeling that while prices may go up, we will just have to tolerate that condition, that that is just a rub of the green.
I do not need to remind the house that last April there was extraordinary unanimity in the press regarding this sales tax. If I may be permitted, I should like to quote what I said on April 16, as follows:
This budget, which is purporting to cure inflation, will cause as its inescapable first result a substantial increase in the cost of living.
I quoted the Montreal Star which said- and how true they were-that this would bring into being a demand for higher wages. On April 16, as reported on page 2052 of Hansard, I said this:
Therefore, having regard to the acute living cost situation which exists, having regard to the fact that it will be accentuated by this budget. . . I am going to propose that this year, instead of
The Address-Mr. J. M. Macdonnell accepting without question the minister's request for money, we say to him that we will not give him the $3,700 million he asks, but that he can forgo at least the increase in the general sales tax.
We ventured to ask that and the results since then have shown how right we were. Incidentally, errors in budgeting seem to grow worse and worse. What we have had is a sort of clairvoyant exercise. What we do want is something that is worked out. I suppose it is no exaggeration to say that if you take the minister's prediction of surplus three months ago, the result over the five months has shown that he has been wrong to the extent of something like $3 million per day. That is the result of my mental arithmetic and I think it is right. No doubt part of the reason is that there was a lag in defence purchasing, but it was pointed out at the time that this would follow. We have had the parliamentary assistant telling us that the government was right right right. All I can say is that if you look backward and really look at the facts you must say that they were wrong wrong wrong.
He is now telling us in effect that their easy money policy was wrong, where they increased and increased and increased the amount of money. He now tells us that was the cause of the trouble; we got too much. I shall not take the time of the house to show how wrong they were on foreign exchange control. They insisted that they knew how to fix the value of our dollar, and in retrospect the fact is that first of all they valued it too high, then too low. They went on with that for years until finally they gave up and admitted that they did not know how to value.
Even when they do something right, they do it at the wrong time. If credit controls had been put into effect even as late as September, 1950, when we suggested it, business could have adjusted itself. The government left them off. They allowed the stimulus to business to continue. During all those months when business had that stimulus things continued to expand, and instead of having months for readjustment the money supply kept increasing. They were on the merry-go-round, going, going, going, and then when the check came people were hurt. People are still being hurt, because the remedy was applied at the wrong time. It is like a man approaching a greasy intersection with his motorcar. Instead of slowing down gradually in the last fifty or one hundred yards, if he keeps going ahead full speed until he gets to the intersection and then puts on all his brakes he causes trouble to everybody.
Another thing that causes confusion and misunderstanding is that the government
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The Address-Mr. J. M. Macdonnell never admits it is wrong. No; I am wrong there, because the Minister of Defence Production (Mr. Howe) did say that if we had known these things three or four years ago we would not have acted as we did.
I want to ask whether we can accept this attitude of negation. Are we to believe that nothing can be done? That is what we are asked to believe. We are told to just wait and see. The trouble is that there are lots of people who do not feel that they can wait. They will get cold comfort out of what has been said to them this afternoon.
The government are now withdrawing the boasts of what they did in the years between 1941 and 1945 and 1946. I have no desire- and I have said this in the house before- to see us return to over-all price controls, the sort of collective system we had during the war. But there is a vast difference between that and doing nothing. I repudiate the attempts which are being made to play up the many failures and slips in the United States. I repudiate the suggestion that what they did there had no effect whatever. I think it did register in people's minds that something needed to be done. Their indirect controls on money worked. While I must admit that their attempts to fix other prices were largely failures, I think it can be said that they were not wholly so. I do not think it is good enough just to say that we are not interested in doing anything, and that in effect is what we are being told now.
I should like to again remind the government, if they are interested, of what one of their friends and trusted advisers had to say. Speaking I think on February 12 last about the possibility of still further price increases Mr. Walter Gordon spoke about having some kind of stand-by organization. He said that if things got worse there might be the possibility of controls at the producer and manufacturing level. I presume something like that was in the mind of the Minister of Defence Production (Mr. Howe), whose words I quoted a while ago.
We should not overlook the fact, and 1 have no doubt the government has this in their minds-I do not know whether the parliamentary assistant was thinking about it this afternoon-that there are signs in the United States of prices falling. It may be that we will have some easement here. But we should remind ourselves that the full impact of defence spending is still to come. If the government does get some easement I do hope that they will not act as they did when they got some easement in Korea, and do nothing.


I again ask the question: Do we really want to stop inflation? When I say "we" I mean everybody. Of course it is easy for people on fixed incomes, for life insurance policyholders and unorganized labour to say that they want inflation stopped, and of course they mean it. But it is not so easy for people who believe that they are in a position to protect themselves. It is very hard for them to believe in the danger. It is hard to make people believe in the early stages of inflation that it could ever undermine the economy. When people are riding high, wide and handsome on a booming stock market you might as well save your breath as try to make them believe that stocks ever do anything but go up; yet there is no sensible person who does not know that one day inflation must end in a crisis and slump, and the longer it is deferred the worse it will be. Of course it has always been a characteristic of booms that people believe they will go on forever. We are always assured that the current boom is different from all other booms. I think this boom is different in some ways from other booms, but there is one thing that is not different. That is human nature, which is just the same as it was in preceding booms, and one day it will assert itself.
I have indicated some things that I think the government should do, and I want to go back to the hackneyed question of economy. Of course one always apologizes for mentioning it, but a very interesting thing indeed has happened. It turns out that an efficiency company was asked to go into the film board accounts, and in five months the film board has cut its spending from $1,060,000 to $554,000, in round figures. I find that quite exciting because if you can cut in two the spending of the film board, apparently with no lessening of efficiency, how about trying that elsewhere? Let us take the Department of National Defence. We give that department $1,700 million. It is not a blank cheque either; it is a filled-in cheque, and we practically kiss the money good-bye when we do that. Will anyone tell me why that should not be looked into? I raised that question in the house before and I was given the brush-off. I was told it was only little companies that could benefit from the services of an efficiency organization. That of course is the bunk. Big companies need it more than little companies, and I suggest that we might very well have some outside opinion as to the expenditure of this $1,700 million. We think that is a lot of money in Greenwood, and apparently there is to be no check of any kind. I believe my leader's request for a committee is going to be met at.

some future time, but at the moment there is no check of any kind. The money just goes into the Department of National Defence and there it is.
I am not suggesting that we should leave all the responsibility on the government. If we really believed we are in mortal danger we would not behave as we are doing. We are neither a callous nor unintelligent people, yet our conduct at the present moment suggests that the stronger elements are prepared to tread down the weaker and to believe that somehow or other they can escape the evil effects of inflation themselves.
Let us look at reality, and here I should like to quote briefly from the London Economist. Here is what happens when inflation gets on the move:
If everyone expects prices to rise appreciably every month, money in the pocket or in the bank becomes something to get rid of. It loses its function as a store of value and becomes satisfactory as a medium of exchange only if it can be exchanged at once.
Think that over and see if you can laugh that off. I ask again: Do we really want to stop inflation? When the Minister of Defence Production (Mr. Howe) last February used those words, which have been perhaps a little overquoted, about people getting "all set", I thought that was just a slip of the tongue, but later on April 9 he said:
I am sure we could get along quite comfortably as consumers and still engage in a substantial defence effort.
Again he said:
Unless all-out war comes, Canadians can continue to live well.
I think that was cheap and easy optimism. It seemed to me nobody could say that if he had full recognition of what some people are suffering. I think that feeling about the government is quite widespread. Indeed I was reminded of lines which were written in different circumstances-some of us will remember them from school days-about the lotos-eaters who were described as mythical creatures who gave themselves up "to dreamy and luxurious ease." Tennyson describes them as living on the hills like gods together, careless of mankind. Then he adds:
For they lie beside their nectar, and the bolts are hurl'd
Far below them in the valleys, and the clouds are lightly curl'd
Round their golden houses . . .
But they smile, they find a music centred in a doleful song
Steaming up, a lamentation and an ancient tale
of wrong,
Like a tale of little meaning tho' the words are strong.
I pass that on with great respect. I hope the parliamentary assistant to the Minister of
The Address-Mr. Noseworthy Finance will read it. He probably knows his lotos-eaters well, and he will know what I mean.
I ask again: Do we want to cure inflation? My answer is that the government gives no effective sign. Instead of a clarion call we have a quavering and uncertain note. With deference, I feel that the speech of the Prime Minister (Mr. St. Laurent) the other day, when he gave us a personally conducted marketing tour, would not put heart into anybody. It seems to me, however, that it indicates what the attitude of the government is if the parliamentary assistant in his interesting speech this afternoon indicated it correctly. No one could detect that he thought there was any danger. Everything was going to be all right some day and in the meantime people would just have to grin and bear it.
As I said, I think inflation is already on the trot and it could easily develop into a gallop. When we think about galloping inflation let us remember one more thing. Let us remember that it would not only create economic discomfort and that sort of thing but it would go to the very root of our institutions. In closing let me read a brief extract from The Economist. It has this to say:
Galloping inflation is not only socially and economically destructive beyond the imagination of anyone who has not experienced it or observed it, it can also be fatal to political liberty itself . . . Inflation may make mankind mad enough to turn with relief to the sort of collective economy that can solve its problem after a fashion by arbitrarily decreeing a large reduction in prices overnight in the style of Russian practice.
I said that I did not want to use extravagant or irresponsible language, and of course I am not suggesting that we cannot meet this situation. What I am suggesting is that there is no sign that I can discover in this country at the present time that the people who should be really alarmed about it are alarmed. Therefore I say nothing more is needed to convince me that the citizens led by the government, led by those who hold the reins of power, should deal with this thing while still they have time.


Mr. J. W. Noseworthy (York South):: Mr. Speaker, first of all I want to congratulate the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne. They both did credit to themselves, and I am sure they will understand and may even pity those of us who cannot share their implicit faith and boundless confidence in the infallibility of the cabinet ministers. I am sure most of us will support much of the legislation that is forecast in the speech from the throne. I want to mention first the omission from that speech which was referred to yesterday by the hon.

The Address-Mr. Noseworthy member for Spadina (Mr. Croll) and has been referred to by others, the omission of any reference to any proposed legislation to increase either veterans pensions or veterans allowances.
The hon. member for Spadina assured us that this omission from the speech from the throne did not necessarily mean the government did not intend to deal with this subject at this session. I am not so confident as he is on that point. I think the government is too well aware of the value of publicity to have omitted a reference to legislation which would have been as popular as that if they had had any intention of bringing such legislation before us at this session. The fact is that veterans and veterans organizations across this country were led to believe, from statements made by government supporters last spring, that this matter would come before us at this session. There is no good reason why it should not. There is one reason, of course, that suggests itself to me, but I am sure the Prime Minister (Mr. St. Laurent) is too great a humanitarian to withhold this help until another session when we may be on the eve of a federal election. I am quite sure the Prime Minister is the last man in this country who would wish to gain votes by withholding veterans allowances and veterans pensions until the eve of an election. That would be placing this government in much the same class as the Ontario Conservative government when they withheld their assistance to provide for the free distribution of milk to school children until after they had announced an election. I am quite sure this government would announce any such assistance before, and not after, they announced a general election.
The truth of the matter is that there is a great deal of suffering among veterans. This suffering will be unnecessarily prolonged unless at this session the government takes steps to bring these pensions and allowances back to their 1948 purchasing power. I certainly hope the confidence expressed by the hon. member for Spadina (Mr. Croll) is well founded, and that we shall soon see some evidence of that legislation being introduced.
There is just one piece of legislation proposed in the throne speech to assist in checking rising prices. I shall discuss the merits of that when the legislation comes before us. I noticed that one Liberal newspaper, which has been holding out for price controls, now assures us that the proposed legislation which will prevent manufacturers from fixing retail prices will save the Canadian public millions of dollars. We shall wait and see. It is difficult to understand why, if the Canadian public could be saved millions of dollars so

easily by such a simple bit of legislation, the government should have allowed the public to be gouged for so many years. The Minister of Justice (Mr. Garson) assured us in a radio broadcast two nights ago that the government only learned about this price fixing when they received the interim report of the MacQuarrie commission. Be that as it may, I suggest that the cabinet ministers are about the only people in Canada who have not known that prices were being fixed in this way. Unless the administration of the new legislation is more effective than the administration of the combines act, this legislation will be just so much more window dressing to fool the Canadian public.
I should like to turn now to the question of inflation itself. The hon. member for Greenwood (Mr. Macdonnell) who has just taken his seat has impressed us with the importance of and dangers inherent in inflation. Most of us I believe are aware of that. The other night the Minister of Justice advised us to read a reprint from the Reader's Digest entitled "Inflation concerns everyone". The reprint emphasizes the dangers inherent in inflation. After reading it I can understand why the minister was intrigued by it. The first question that came to my mind was, did the Reader's Digest learn how to control inflation by studying the Canadian government's policy or did the government get their policy from reading the Reader's Digest? There is a great deal of similarity between the two.
The Canadian dollar, thanks to the inflation which the government has failed to control, is now worth just a fraction more than 50 cents. Every Canadian who lent his savings to Canada before the war, even during or since the war, finds those savings now cut in half. Every Canadian who owns any kind of bond, life insurance policy, savings bank account, annuity, industrial or old age pension, is affected by inflation. Every recipient of workmen's compensation, children's or widows' allowance is the loser. In the words of the reprint to which the Minister of Justice refers:
The citizen who has any claim to a fixed number of dollars payable to him, or his wife, or child, now or in the future, is being hurt badly by inflation.
I must also add that every business, every corporation and every bank is affected. Profits are not what they used to be. I must remind my colleagues, who sometimes point out how corporation profits have increased, that under our free enterprise system corporations must have about twice as much profit now as they did a few years ago in order to keep abreast of inflation. Certainly it is not necessary under that system for veterans pensions to be doubled, old age pensions to be doubled,

civil servants' wages or any wages for that matter to be doubled. Corporation profits must be doubled or we will not get any production. We shall have unemployment. The system would not function if corporation profits were impaired too much by inflation.
Be that as it may, Canadians must get all the solace they can from the assurance in the ;hrone speech that the anti-inflationary measures already in force have checked the upward trend of prices on goods and services affected by their operations. Of course, the "ordinary Joe" would not understand what that means. The measures were explained by the assistant deputy minister of finance, Mr. K. W. Taylor, who was speaking in Guelph in July. As reported in the Guelph Mercury for July 26 he said:
"The government's policy has been designed to secure 45 per cent of the increase from sales and excise taxes, taxes on spending-in other words," said Mr. Taylor, "it is using the device of higher prices to curb inflation by restraining consumption and encouraging saving."
Since the sales tax and the excise tax are added to the price of goods, the Minister of Finance (Mr. Abbott) must believe that if he can just get prices high enough he will stop inflation. If he gets them high enough, or even very much higher than they are, none of us-including even cabinet ministers

are going to be able to buy much of anything. In his effort to stop inflation he has most certainly succeeded in curbing or restraining consumption of such articles as milk and other necessities. Whether or not he has increased savings is another question. No statistics are available, or none that I have been able to find; but I am sure anyone conversant with the day to day lives of the ordinary, working-class .people of this country must know that these people are finding it difficult enough to provide the bare necessities of life and that they just have not anything left for savings. When the Minister of Finance appeals to the ordinary working people of this country to save more, he is just asking them to do the impossible at the present time. The Brookings Institution did: a considerable amount of research a few years ago on this whole question of saving. At page 108 of a book entitled "Controlling Factors in Economic Development" by Mr. Moulton, they had this to say:
. . . the evidence shows conclusively that those in the lower income groups save a negligible percentage of their income; that the percentage saved rises steadily through the middle brackets; and that the proportion set aside for investment in the upper levels of income rises rapidly and often runs as high as 40 or 50 per cent. Savings are negligible at the bottom of the income scale because earnings barely, often hardly, suffice to cover minimum consumption requirements.
The Address-Mr. Noseworthy
That is the situation today in Canada as far as the great majority of the ordinary people of this country are concerned.
Then the second policy or the second device adopted by the government, according to Mr. Taylor, was that the Bank of Canada raised its interest rate from 1| per cent to 2 per cent. Not even Mr. Taylor attempted to explain to his audience just what help that was to the ordinary people of this country. Then he went on to explain how the government had placed restraints on the expansion of credit for the purchase of washing machines, refrigerators, electric stoves, automobiles, and all those things that cabinet ministers consider to be luxuries for ordinary people. The purchase of these things was made more difficult. More money was required for the down payment. The time of payment was reduced. What is the result as far as the economy of the country is concerned? Prices are no lower, except perhaps in a few instances where retailers were forced, in order to get cash, to sell some of these goods at sacrifice prices.
There has been no general decrease in prices as a result of these measures. However, pockets of unemployment have developed in this country. Those who are most closely concerned with those are confident that the government measures are in large part responsible for them. There are approximately four thousand unemployed automobile workers in the city of Windsor. We have the spectacle, reported in the daily press not many days ago, of high ranking cabinet ministers going over to Washington and pleading with the United States government to facilitate the entry of Canadian unemployed into that country. We have the spectacle of high ranking government officials trying to export our unemployed.
I do not know what the situation is in other provinces, but during the recess I was in most of the cities and towns of Ontario, and I can say that there are few towns or industrial centres in Ontario today where all the factories are working full time. In town after town you will find factory after factory where people are employed three and four days a week. Yet the minister calls for more production on the one hand while his policy is partly responsible for the pockets of unemployment and part-time employment which retard production. Certainly thousands of people cannot buy refrigerators, used cars or many of the things they want to buy; I refer to those people who have been accustomed to buying and paying for their purchases out of income. But the man of means, the man who has the money to pay for electric refrigerators or used or new cars, can buy as many as he wants. Certainly if any government in our history ever

The Address-Mr. Noseworthy introduced legislation that discriminated against the lower class people of this country, this government has done so in its attempt to curb inflation. What has happened as a result of the government's policy? I think it was an official of the Ford Motor Company who called the policy insane. I think he was being generous. Here is what happened. A comparatively small dealer on the street on which I live last year paid the government over $10,000 in taxes on his business. He assures me that this year he will not be required to pay the government a nickel in taxes. Some of his losses will have to be charged back against the tax which he paid last year. Instead of paying $10,000 to the government in taxes this year he will be paying more than $10,000 to finance companies who have had to finance the stock of cars he purchased in the spring and has been unable to sell. I know the Minister of Finance (Mr. Abbott) will say that he will not lose on that deal; he will get his taxes from the finance company instead of from the automobile dealer. As a matter of fact it may be more convenient for him to collect his taxes from a few finance companies across the country than to have to go out and collect them from a host of small businessmen scattered all across the country. But in my opinion that is not good business for the country, even though it may be good business for the Minister of Finance.
I think we are all agreed that we are experiencing one of the greatest inflationary periods in our history, although the Prime Minister (Mr. St. Laurent) seemed to indicate the other night that he was not convinced of that fact. The fact that certain goods retailed at higher prices in a particular Washington store than similar goods retailed for in a particular Ottawa store seemed to give him some consolation and assurance that after all inflation is not too bad.
There is genuine disagreement in the house on the best measures to check inflation. All opposition groups in the house, a majority of the Canadian people, our four great labour organizations, veterans organizations and numerous other organized groups think, and have been saying, that price control would help. The government apparently does not believe that price control will help. They doubt whether it will work in peacetime. The Prime Minister indicated that the government will not change its mind concerning price controls, but that if the Canadian people want price control they will just have to elect another government. I would say that that is taking an unfair advantage of the huge majority the government has at the present time, and is putting the Canadian people on the spot. Boards of trade, chambers of commerce and manufacturers' associations all

agree with the government. The Searle Grain Company in its grain market features for October 10 has this to say:
Any attempts that have been made by any government to control prices always have failed in peacetime.
That is the voice of big business. Apparently that is what the government believes, and that is what the Liberal backbenchers lead us to believe they think. Of course the first question we ask is: Can this really be called peacetime? Are we or are we not at war in Korea at the present time? It is generally agreed that defence expenditure is one of the most potent factors in inflation. That is true to some extent in Canada today. When, during the war, expenditures on defence created inflationary pressures, the government recognized the important part that price control could play in easing those pressures and holding the prices. Our experience during those years conclusively proved the effectiveness of price control. The government took full credit for that success in the election of 1945. They promised the Canadian people all across this country that if returned to power they would maintain the purchase value of the Canadian dollar. How well they have kept their promise!
The impact of war expenditures or defence expenditures is one of the main factors creating inflationary pressure. It is difficult to understand why the government so persistently refuses to apply the controls that worked so successfully during the war. The Prime Minister tells us that during the war there was great patriotic fervour abroad in this country that made the application of price control acceptable to the Canadian people. What ground has the Prime Minister, or any other cabinet minister, for believing there is not the same patriotic fervour today when our potential enemy is communism instead of fascism?
The Canadian people have asked for price control in every way they possibly could. There is no reason to believe that they would not lend their full co-operation to the government in the application of price control.
The speech from the throne tells us:
Every measure will be taken which my ministers believe will be effective in counteracting inflation without impairing our free institutions.
Somehow the government seems to have the idea that the application of price control at this time is going to wreck all our free institutions. Which of our free institutions was wrecked by the application of price control during war years? Freedom of speech, freedom of religion, freedom of assembly, freedom from want, freedom from fear; were these great democratic freedoms jeopardized by the application of price control during
18$

the war years? What reason is there to believe that they would be jeopardized by the application of price control today?
The freedom of profiteers to gouge the public is not an essential democratic freedom. If that freedom is to be impaired by the application of price control, that is not destroying our democratic freedom. The control of a nation's economy by a government democratically elected is in my opinion not an abrogation of freedom.
The Prime Minister finds consolation in the fact that the price index has been rising in Great Britain in recent months, and therefore that is justification for the government's refusal to apply price control here. The fact is that through four years after the war and for the first full year following Korea, price control worked in Great Britain as it worked in Canada during the war years. Between June, 1950, and July, 1951, the first year after Korea, the cost of living index rose 22-2 points in Canada. During that same period Britain's cost of living index rose only 12 points. It is only since they have had to import essential goods necessary to defence, at inflated prices, that they have found their cost of living index rising.
Other speakers have dealt with the unfairness of the comparison the Prime Minister made. Mr. Taylor, assistant deputy minister of finance, is reported in the Guelph Mercury for July 26, as saying, with reference to price controls:
The time may come when in an ultimate crisis we shall have to throw everything we have into the balance. It would seem sensible to hold these weapons in reserve-[DOT]
That is, price controls.
-for the critical moment.
In the opinion of millions of Canadians that ultimate crisis is already upon us. This is the critical moment, and the time the government should meet the wishes of the Canadian people through the application of price control.
Now, Mr. Speaker, I am going to take a few moments to venture where angels fear and only Social Crediters dare to tread. I should like to look for a moment at the theory that inflation is caused by too many dollars chasing too few goods. The Reader's Digest, in its reprint, recommended by the Minister of Justice (Mr. Garson), has this to say about inflation:
Inflation is an increase in the total supply of money which people have and want to spend that is greater than the supply of goods available for them to purchase.
I do not know whether my Social Credit friends would agree with that definition, but I
The Address-Mr. Noseworthy should think the Minister of Finance (Mr. Abbott) would not quarrel very much with it. Some of my economist friends point out that it is not the total supply of money that matters but the rate at which it goes round and round. I can find no authentic statistics to show whether money is going round and round faster now than it did five years ago. All I know is that it goes out faster, and it does not come back. However, that may not be relevant to the discussion.
I have taken the trouble to check some figures regarding money supply and available goods for the past few years. These figures are taken from the Bank of Canada's statistical summaries for the appropriate years. In money supply I include, first, notes and coins outside the banks; that is, money and coins in the pocket, pocketbooks, old stockings or wherever Canadians keep what notes and coins they possess; second, so-called active bank deposits, plus the active portion of savings accounts; third, inactive savings accounts and, fourth, government of Canada securities held by the general public. These, of course, would be exclusive of the commercial banks, the Bank of Canada and government accounts. I am informed that those four taken together represent the volume of money available for Canadians to spend, if they so desire.
For goods available I have taken the gross national product as estimated by the dominion bureau of statistics. I realize of course that part of that gross national product is defence production not purchasable by members of the public. I have worked out the percentage of defence production that is included in the gross national product each year.
In 1939 our total money supply was $6,193 million. Our goods, available in our gross national production, were valued at $5,598 million. It will be noted that in 1939 they were almost in balance. On the theory that money supply should equal the value of goods available, 1939 should have been an exceptionally good year. It will be recalled that it was only in the latter part of 1939, when stimulated by war, that prosperity eventually got around the corner we had been watching all through the thirties.
In 1945 our money supply amounted to $17,215 million. It had nearly trebled since 1939. Our goods available in that year were valued at $11,810 million. The excess of money over goods available in 1945 amounted to almost $6 billion, or as much as the total supply of money in 1939. That should have been a good year for inflation. There was $6 billion more of money available than of goods, and 25 per cent of our gross national

The Address-Mr. Noseworthy product in that year was for defence expenditure, and not available for purchases by members of the public.
Why did we not have inflation in 1945, if the money versus goods theory is sound? Perhaps the money did not go round fast enough in 1945 to create inflation. I have no figures on that. Is it possible that price controls, which had been in effect prior to 1945, were a factor in holding off inflation in 1945, when we had $6 billion more in money than we had in goods?
Then in 1950 inflation really got rolling. Our money supply totalled $18,366 million, while our goods available in that same year were valued at $17,700 million. When inflation began to be felt our goods available had almost caught up with our money supply. Only 2 per cent of that gross national product in 1950 was for defence purposes so that the goods available for purchase and the money supply were just about in balance again that year.
Then in August of 1951 our total money supply stood at $18,272 million. The estimated goods available will be valued at $20,000 million. That is, we shall have $2 billion worth more of goods available than we will have money to buy them. On the policy followed by the government, we should be out of inflation by now. Our supply of goods has more than caught up with our supply of money.
The conclusion I wish to draw is that there is ground for doubting the validity of the theory upon which the government's entire anti-inflationary policy is based. There is ground to doubt the effectiveness of that policy. Price controls, while they may not cure inflation itself, certainly can provide relief for many millions of people who are hard pressed to make their pay envelopes and fixed incomes match their needs. Price control did work in this country during the war. We are not exactly at peace now. They did work in Great Britain during years of peace, until the inflated prices of goods imported for defence purposes began to place an almost unbearable burden upon that country's economy. The Canadian people have given every indication of their willingness to accept such limitation as controls will place upon their freedom, provided it will end this chaos. Before closing I should like to quote from the proceedings of the banking and commerce committee, volume I, 1944-45, page 722. I want to read a question which I asked Mr. Graham Towers. We had been discussing the possibility of there coming a time after the war when there would be more money in the pockets of the Canadian people, when they would have more government bonds, more bank deposits and more
I Mr. Noseworthy.]
money to spend than possibly there would be goods for them to buy. I asked this question:
Is there, for instance, any danger that immediately following the cessation of hostilities the increased deposits and the money now in the hands of the Canadian people may be released suddenly for the purchase of goods that have been withheld from purchase during the war? There is evidently a danger of that. What control has the Bank of Canada over that situation?
Mr. Towers replied:
Oh, none, because we cannot control millions of human beings who have money in their possession. To the extent they try and spend it in greater quantity than there are goods available then only direct controls will keep things in order.
I direct that latter part to the attention of the Minister of Finance (Mr. Abbott). That is what was said by Mr. Graham Towers, the financial adviser to the minister, when answering a question having regard to a situation which is quite similar to that which we face today. I have already mentioned that apparently the government recognizes that the time will come when they may, in the words of Mr. Taylor, have to throw everything into the fight against inflation, including price control. I suggest that that time is now.


Howard Charles Green: Mr. Speaker, unfortunately I did not have the privilege of hearing the speeches of the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne, but I understand their efforts were excellent. I can quite believe that from my acquaintance with them around the halls of the building. I was particularly interested in the remarks of the hon. member for Yukon-Mackenzie River in connection with Canada's northland. He pointed out that eventually railroads should be constructed to connect the various northern centres. I often wonder whether Canada will ever become a great nation unless she develops her northern country to the fullest extent. Probably most hon. members read an article by that great explorer Mr. Vilhjalmur Stefansson, in the August 1 issue of Maclean's magazine. It dealt with Canada's northland and the title was "We're Missing our Future in the North.": Here is what the subheading had to say:
A famous explorer says that by exploiting our rich northland we can match United States industrial wealth and support as many people.
The author then went on to prove those statements. I think it was most timely for the house to hear the speech of the hon. member for Yukon-Mackenzie River. I am sure that any proposal within reason for the development of the north will have the support of the vast majority of the members of 'his

parliament. We saw that last year when a bill was introduced to provide tor the construction of a railroad line from Sherridon to Lynn Lake in northern Manitoba.
In British Columbia the Canadian National line from Jasper to Prince Rupert cuts across the centre of the province and practically all the area for hundreds of miles north of that line is untapped, of course with the exception of the Peace river country and the district around Atlin. There is great work to be done in the north and one practical thing the government could do would be to provide separate seats for the Yukon and the Mackenzie River districts in the redistribution which is to take place shortly. That was advocated when the last redistribution measure was enacted but the suggestion was not accepted. I think the time has come when each of these districts should have a member, as it is quite impossible for one member to represent such a huge area.
I propose to direct my remaining remarks to three ministers in particular, the Minister of Finance (Mr. Abbott), the Minister of Veterans Affairs (Mr. Lapointe) and the Secretary of State for External Affairs (Mr. Pearson). I appreciate greatly the fact that they are all here to take their medicine.


Douglas Charles Abbott: We were warned.


Mr. Pearson:: We were especially invited.


Howard Charles Green: First of all, the Minister of Finance. The subject which involves the minister is perhaps the most important of the three, although I submit they are all important. I am thinking particularly of the cost of living and inflation. In his speech earlier in the week the Prime Minister (Mr. St. Laurent) asked for suggestions as to how these great issues might be met. I am going to try to make some suggestions today. I have been somewhat disappointed that there have been so few suggestions from private members on the government side. I hope they will not be so bashful in the remaining days of the debate. They can do a great service to their fellow Canadians as well as to their constituents by getting up and expressing their views on these subjects. While the Prime Minister asked for suggestions, I really believe word went out from the government whip that anyone who opened his mouth would be shot. That seems to be the way in which this debate has been developing. I suggest that my good friends on the back benches on the Liberal side be a little more courageous and step in and tell the government what they think.
Of course there has been a tremendous rise in the cost of living. It has been going up
The Address-Mr. Green in a startling way, a way which has been distressing, not only to the Canadian people but to every member of this house regardless of party. The Canadian cost of living index is now definitely higher than the United States index. I could not understand the Prime Minister's statement the other day to the contrary. Mind you, he covered it very cleverly. He took us down to Washington, which is the centre of the world now, that great, roaring, busy city where everybody is a millionaire, or perhaps a billionaire, and where prices do not mean very much. He compared Washington prices with the prices in modest, sensible Ottawa.


Donald Methuen Fleming: Where is modest, sensible Ottawa?


Howard Charles Green: Right here. You should know it. If you would just get away from Toronto you would realize some of the good qualities of Ottawa. The Prime Minister reached the conclusion that because prices in Washington were a little higher than in Ottawa everything was lovely, and Canada's cost of living index was lower than that of the United States. I have here a report of a summary of the Bank of Canada published on September 1 and headed:
Canada's c.o.l. now higher than in U.S. Food, especially meat, big factor in sending price index soaring.
The article reads in part:
For years living costs in Canada were a lot lower than they were in the United States. Now, says the Bank of Canada, it is the other way round. The reversal in the cost of living pattern took place in June. Before that the cost of living index in the United States was running a lot higher than the one in Canada. In June, says the bank in its monthly statistical summary, the paths of the two indexes crossed. The United States index levelled off; the one in Canada kept on climbing. Going a step further, the bank makes a revealing comparison of living costs in the two countries over the twelve month period, July, 1950, to July, 1951. The upward drive in living costs, it finds, was far more significant in Canada than in the United States.
How the Prime Minister can take a contrary view is beyond my understanding. So much for the rise in the cost of living. Then there is the question of inflation. The inflation we already have in Canada means that the insurance policies taken out by most Canadians to protect their families and the government bonds purchased by most Canadians against sickness or old age have lost approximately half of their value. That is the position in Canada today, and it cannot be gainsaid by anyone. I believe that the cost of living and inflation are worrying the Canadian people far more than the Prime Minister of this country realizes.
It seems to me there are two basic facts which must always be kept in mind in considering this question. First of all,

The Address-Mr. Green increases in wages are now largely tied to the cost of living index. When the index goes up, in most cases wages automatically go up, and of course the result eventually is a further increase in prices. There is also irresponsible-and I repeat the word "irresponsible"-price setting going on in this country, as there has been for many months. I do not believe, and I do not see how any member of this house can believe, any authority in the country other than the government can put a stop to that sort of business. The government alone has the authority to take sortie steps to break this chain.
The second basic fact which must always be remembered is that we are in what the Minister of Labour (Mr. Gregg) the other day very aptly called a half war half peace era. In fact he summed it up very neatly when he said, "the period of half war and half peace of unknown duration". That is the situation in which we are today and it will continue for many years, certainly until Russia decides that it is going to pay her to make more friendly arrangements with the free nations. We are not in a time of peace when there are the usual checks and counterchecks. That simply is not the position, in which Canada stands today. Those two factors should be remembered at all times by Canadians when considering the questions of the cost of living and inflation.
The government, largely through the Minister of Finance (Mr. Abbott), has taken certain steps to meet the situation. There has been an increase in taxation, principally in income, sales and excise taxes. Then there have been consumer credit regulations. They were designed of course to meet these two problems. They may have helped. I think that as things are working out a change should be made in the credit regulations. I think, for example, that longer time should be given people to pay for their cars and other commodities, but in this debate I am not going into details on this particular question.
Then the government arranged through the Bank of Canada for the restriction of credit to business concerns. I believe that has hit small businessmen a great deal harder than the large ones. I think it has been unfair in that way. Then of course there have been appeals to produce. The Minister of Finance and other ministers have urged the Canadian people to produce more goods. In some instances people were urged to work longer hours. There has always been behind such statements a sort of veiled suggestion that Canadian workmen were not earning their wages and I think the suggestion was unwise and unfair. However there have been these appeals for greater production.
[Mr. Green.1
Then there have been appeals to save. Not quite a month ago the Minister of Finance advised the women of Canada that they should be thrifty, that they should cut out thoughtless spending and cultivate an attitude of mind in which prudent household management is both patriotic and fashionable.


Mr. Graydon:: How did that go over at home?


Douglas Charles Abbott: Loud cheers.


Stanley Howard Knowles: Did Mrs. Abbott turn the radio off?


Howard Charles Green: I have an immediate reaction as expressed in an editorial in the Vancouver Province of September 29 which is entitled, "A Long Way From the Kitchen". It reads:
Canadian housewives are hoping that Mrs. Doug. Abbott will shove a shopping basket in her husband's hand and send him to market to buy the family groceries. After hearing the finance minister urge the ladies to beat inflation by cutting down on "thoughtless spending" and cultivating "an attitude of mind in which prudential household management is both patriotic and fashionable," householders wonder where Mr. Abbott has been all the time. As far as people working for average wages are concerned. "prudential household management" is the only thing that keeps good food on the table.


Douglas Charles Abbott: Prudential?


Howard Charles Green: Then the editorial ends by saying-


Douglas Charles Abbott: Prudential? Is it not "prudent"?


Howard Charles Green: It says "prudential". I think it should be "prudent".


Douglas Charles Abbott: I think it should be "prudent". We are not an insurance company.


Howard Charles Green: I have no doubt the minister is sorry that he said it, anyway.


Douglas Charles Abbott: Far from it. I am interested in the opinion of editorial writers but I do not necessarily look on them as the last word.


Howard Charles Green: The editorial ends by saying:
If he puts on an apron, helps with the dishes-


Douglas Charles Abbott: He does.


Howard Charles Green: It continues:
-and pays a few visits to the grocery store he won't wag his finger at the housewives again. Right now they have for Mr. Abbott the same answer they have when their husbands try to raise cain over household expenses. "Let's see you do any better."
In his speech the other day the Prime Minister (Mr. St. Laurent) admitted to the house, anidi to the country, that the government's policy for meeting inflation has failed. This admission will be found at page 33 of Hansard. It reads:
I must confess that there are many of our friends on this side, and in that other corner of the house near Mr. Speaker, disturbed at the fact that the government has not been able to devise any more

effective measures of combating inflation than those which have been so far proposed to parliament.
Now, in October, 1951, he has only one proposal. We find a reference to that at page 41 of Hansard:
... as regards immediate additional measures to curb inflation, while others may develop, the only one we are prepared to submit at this time is the one that will arise out of this report of the combines committee with respect to resale prices.
I do not think that is going to have a very substantial effect on the index of the cost of living;
The Prime Minister admits that it will not be of much effect. I am wondering if this one proposal will not even be detrimental. On the surface it looks as though it might be a good thing but since coming here I have had representations from extremely reliable and responsible businessmen in Vancouver, largely men in small businesses, who point out that a measure of this kind is simply opening the way for the large stores to use what is known as the loss leader system. In other words, the large store will cut the prices of these goods upon which the price has hitherto been set by the manufacturer, and in that way draw people into the store and sell them other goods at greatly increased prices. In the process the little fellow will be put out of business.
I do recommend that the government, in considering this legislation, try to work out some prohibition of this practice of loss leader selling. Certainly the measure is going to be of little help if it results in putting a great many small merchants in Canada out of business. If that happens the consumers are going to be hit worse than they are at the present time.
Also I should like to ask the Minister of Finance (Mr. Abbott) to make a frank statement on the following suggestions, which I am making in all earnestness. In the first place, why would it not be good policy to reduce the sales tax from 10 per cent to 8 per cent? The revenues which are rolling in show conclusively that an increase in the tax was not needed to carry out the government plans for this fiscal year. Obviously the tax had the effect of increasing prices, in fact it pyramided prices because it was levied at the manufacturer's level. If a reduction were made in that sales tax at this session, the effect might be to start a reduction in prices right along the line. It might have an effect far greater than one would expect under normal conditions. If the government gave that lead by cutting down the sales tax and saying to the Canadian people, "We cut that tax for the one purpose of helping to reduce the cost of living", then I
The Address-Mr. Green believe the results would be very beneficial. Someone has to take the lead in reducing the cost of living.
Incidentally, with regard to taxation, I believe the Minister of Finance must bring up to date his ideas of what are necessities in Canadian homes. He still believes an electric range, an oil range or gas heater is a luxury. In most centres that is not the case, and certainly not in Vancouver. These things are necessities. They have to be bought by practically all the young people setting up homes, and the Department of Finance should keep that fact in mind.
I would ask the Minister of Finance to explain also why it would not be possible to establish a basic food menu and basic clothing requirement for Canada, and to maintain that standard. In this way a good home manager would know what her cost would be for this basic standard. One of the most distressing features of the situation today is the uncertainty of prices next week. It does seem to me it should be within the ingenuity of the departmental advisers to work out a basic standard, one without any frills, and then adopt some scheme of maintaining that standard. I realize that might involve subsidies. It might involve certain controls. It might involve such things, for example, as helping with the shipment of feed grain into the Fraser valley in British Columbia so that dairy farmers could produce milk at lower cost. Of course, they would have to pass that saving on to the consumers in Vancouver and the other cities in the area. I only mention this as an example.
I should like to hear from the Minister of Finance just why some scheme of this kind cannot be worked out.


Douglas Charles Abbott: Just to be clear on what my hon. friend means, does he refer to the sort of utility garment they have in the United Kingdom? Is that what he has in mind, utility suits and so on?


Howard Charles Green: Milk and bread, for example, would be in the basic standard, and the same for clothing.


Douglas Charles Abbott: What is meant by "a basic standard"? Does he mean a fixed price for those commodities?


Howard Charles Green: Yes. Then the minister does not get very far by merely urging the Canadian people to save. Mind you, I think he is quite right in doing that, but why would it not be possible to go farther and arrange for refundable savings as was done during the war. There could be a provision that money spent for life insurance and for the payment of mortgage principal would be exempt.

The Address-Mr. Green


Douglas Charles Abbott: That means compulsory
savings?


Howard Charles Green: Yes, such as we had in the war. I believe some scheme of that kind would help. It would certainly be an incentive to the Canadian people to save.
I believe further that the government must tackle these unjust prices which, in effect, amount to profiteering. There is a great deal of that, and I know it is difficult to meet. I believe the situation in Canada today is such that we must tighten up our laws to curb this type of profiteering.
Then why is it not possible to take steps to enable our own people to get our own products at reasonable prices? As I said before, we are in a half-war period. The United States is running short of many resources. She is a wealthy and powerful neighbour, and becoming more wealthy and more powerful every day. She is depriving our people of some of their own production. The other day the Prime Minister said, as reported at page 34 of Hansard-


Douglas Charles Abbott: We are buying more of United States production than we are exporting of Canadian production.


Howard Charles Green: Just a minute. The minister has not yet got my point. In dealing with the export of our commodities-he was dealing with prices and one reason that prices went up-the Prime Minister said, as reported at page 34 of Hansard:
That is true here as well as it is in the United Kingdom;-
He was referring to the necessity to import goods and to pay the price charged by the other countries. Then he said:
-and in this country there is not only the prices we have to pay for the goods we import but the prices our Canadian producers can obtain for the goods they export, unless we prevent them from exporting them and force them to take from the Canadian market for their labours less than they can obtain by exporting.
He lays down the policy there that this country is going to allow all its goods to go out, if necessary, if a higher price can be obtained beyond the boundaries of Canada, and the Canadian people are going to have to go without. That is a new suggestion in Canadian policy.
Mr. Abbot!: How are we going to pay for the excess of United States production that we bring to Canada?


Howard Charles Green: We do not need to sell them all of our production.


Douglas Charles Abbott: We do not. We buy more from them than we sell to them.	t


Howard Charles Green: One of our great problems in Canada today is our increasing dependence

on the United States. That is one of the biggest problems we are facing right now. The picture is all neatly put in the fact that while the Americans eat our beef, Canadians are eating horse meat.


Douglas Charles Abbott: We use American steel.


Howard Charles Green: I have here a letter written to the Vancouver Sun which sums up the situation neatly. It is entitled "Meat for Thought" and reads as follows:
The present trend of piling up revenue surplus at the rate of over a billion and a half annually while aged veterans are existing on $35 monthly each for man and wife is a terrible indictment of the political party that cheerfully admits full responsibility for our so-called prosperity.
This in addition to the fact that more and more thousands of Canadians are daily being compelled to resort to horsemeat in their family diet, because of Ottawa's strange reluctance to impose controls on essential food costs, may have repercussions in the not too distant future.
I can foresee the day coming when the Liberal party, seeking votes for re-election, is greeted with a loud horse laugh and a resounding "neigh! neigh!" from Canadians too full of horsemeat for words.
In the meantime, would suggest the following slogan the Liberals could use in their next campaign :
From the stable To the table
We brought back the horse,
Lacking sincerity We called it prosperity-
Fido will be the next course.
I can suggest a much better slogan. It is: "Vote liberal and eat horse meat".


Douglas Charles Abbott: Vote Conservative and eat no meat.


Howard Charles Green: The Prime Minister was
extremely smug about the whole question. He said that only certain sectors of the population are being bothered by the increased cost of living and that the others are doing better than they have ever done before. He said, "Of course, I hope that the inflation will stop". I suggest one thing to the Prime Minister; that is that he start eating horse meat right away and continue doing so until he wakes up to what is going on in Canada.


Mr. Marlin:: Under these hours he is not getting a chance to eat anything.


Howard Charles Green: A discussion of the increased cost of living brings me to the next minister, the Minister of Veterans Affairs (Mr. Lapointe).


Douglas Charles Abbott: I hope there will now be more constructive suggestions.


Howard Charles Green: Last session the Minister of Veterans Affairs admitted that the basic disability pension is too low, and he tried to meet that situation by a handout known as

the unemployability supplement. His supporters on the veterans affairs committee found themselves in great difficulties. The bell wether of the Liberal flock in the veterans affairs committee, the hon. member for Spa-dina (Mr. Croll), had a terrible time backing up the government and explaining why it was not increasing the basic rate of pension. Finally he produced the good alibi: Oh, well, the cost of living was probably going to stop going up right away anyway, and it was not necessary to do anything at once. From what he said when he spoke last night, I observe that he has at last become bold enough to say, as reported at page 146 of Hansard:
I do not think we can delay any longer that which is now long overdue. It has now become an urgent matter, and must be dealt with at this session.
It has become urgent, Mr. Speaker, because the veterans from coast to coast have put the heat on with regard to this question and are demanding action. The Minister of Veterans Affairs and the government obviously thought that this unemployability supplement would stop the protests and that they would get by with that measure.
Now the veterans of Canada are incensed over this treatment. I have never seen them as incensed over anything before. The plan is obviously inadequate. It breaks down the whole basis for disability pension, which was that the pension is paid as of right and that it is based on the cost of living and on wages. There can be no doubt of those statements. It is not based on the average wages paid in Canada. It is based on unskilled wages. I have that statement here in the Ralston report away back in 1924. Hon. members will find it in the second interim report of the royal commission on pensions and re-establishment, dated May, 1924, at page 44. The principle is this:
The earning power of a man In the class of the untrained labourer will be sufficient to provide decent comfort for himself and his family, that is to say, a little more than enough for subsistence.
From the start that has been the principle in pension legislation in Canada. Since last there was an increase in pension, in 1948, the cost of living has gone from about 140 to about 190. The average unskilled wage last year stood at 244-6, as compared with the year 1939 and this year is expected to be over 260. These figures are from the Department of Labour.
The requests of the veterans organizations of this country for an increase of 33J per cent in the basic pension are therefore entirely reasonable. I would hope that this increase will be granted at this session, and that there will not be an attempt to do more cheeseparing by bringing in an increase of 20 per
The Address-Mr. Green cent or 25 per cent. There is a wrong which should be righted at once. It is a disgrace that we have had to fight in this house all during this present year for fair treatment for the veterans of Canada. The same argument applies in large measure with regard to the war veterans allowance. It also should be increased, certainly to the level of the old age pension in the respective provinces.
My final remarks, Mr. Speaker, are directed to the Secretary of State for External Affairs (Mr. Pearson). When he speaks, I would ask him to answer two questions. The first one is this. Why has Canada taken no stand with regard to the abrogation by Egypt of the Anglo-Egyptian treaty and the threats which have been made by Egypt to the United Kingdom and actually to all of the nations of the commonwealth? I asked him two days ago what position the Canadian government is taking on this question and I received this strange reply, as reported at page 69 of Hansard:
The situation in the area to which my hon. friend's question refers is a difficult one indeed at the moment, and highly inflammable. I do not think any statement from me at this time in answer to a question will be helpful.
Well, New Zealand and Australia answered at once. Yesterday the United States answered. I hold in my hand a clipping from last night's paper and right across the front page we find the following:
U.S. backing Britain in Egypt.
In the same article we find the same statement from France. These great allies of ours did not find the situation too inflammable to make a statement as to where they stood with regard to these actions in Egypt. Why is Canada waiting? Is she waiting until her two warships get out of the Mediterranean? Is that the reason for the delay?
The minister cannot argue that Canada is not interested in the Middle East. In the speech from the throne we find that the government is going to recommend to this house that Greece and Turkey be admitted to the North Atlantic Treaty Organization. That means if Turkey is attacked Canada will be bound to come to her defence, yet no stand is taken with regard to Egypt where the whole lifeline of the commonwealth is in danger; in fact this may mean life or death to the free nations of the world.
Last spring, when there was a commonwealth defence conference for the Mediterranean, Canada would not even send a minister because she said she was not that much interested. She sent somebody from one of the departments. I would ask the minister to tell us very frankly what is the position of the Canadian government with regard to this Egyptian trouble.

The Address-Mr. Green
Second, let him tell us why the government declines to enter a Pacific pact. When the pact was signed at San Francisco Canada was invited to join. I hold in my hand the Vancouver Daily Province dated September 1, 1951, which says:
United States, Australia sign Pacific past. Nations hope Canada will join.
The three countries in this new alliance, which is similar to the security arrangement entered into earlier in the week between the Philippines and the United States, are anxious that Canada become a partner to stretch the alliance from the Arctic to the Antarctic.
When the minister was in Vancouver telling Canada for the first time about what had happened at San Francisco he said that there is a Pacific pact between the United States, Australia and New Zealand; another peace pact in the Pacific between the United States and the Philippines; and that the United States and Canada have a Pacific pact. Well, that was just evading the issue. United States and Canada have no Pacific defence pact. They have a general defence pact, I agree. But the general situation is that Canada, which is a country involved in the Pacific, should be in this defence pact, and should be urging that other nations of the Pacific become members of the pact. I have not time to quote the editorials I have, but certainly in British Columbia I believe there is no difference of opinion on this question. We all believe that Canada should be a member of the Pacific pact.
These are the two questions. Finally I have just one suggestion to the minister. It is that Canada should urge upon the other commonwealth partners that there be adopted at once a policy of rebuilding the strength of the commonwealth until it is once again the third world power. Perhaps the gravest danger of war today is that we live in a two-power world, which is of necessity a highly dangerous condition. If the commonwealth were a third world power it would be an influence for peace. I think the people of the nations of the commonwealth are more peace-minded than our neighbours to the south. That is because of our geographical situation. I do not blame the people of the United States a bit for their attitude but the fact is-and everyone here knows it-that the people of the commonwealth are more peace-minded than either the people of the United States or the people of Russia. Perhaps if we had a strong commonwealth again we could give a lead in the settlement of these disputes. We are not in a position to do so now because of the weakness of the various nation members of the commonwealth who are all more or less camp followers in the United States camp.

The Canadian policy on this question, as announced by the Secretary of State for External Affairs a few days ago, has been to be on both sides. He made a speech on September 25-


Mr. Speaker:: Order. The hon. member's time has expired.


Some hon. Members:: Go on.


Howard Charles Green: I am sorry. I thank hon. members for allowing me to finish. In that speech he was dealing with the United States-Canada relations, and he used very significant words in explaining that the-


Mr. Speaker:: Order. Has the hon. member unanimous consent to continue?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Lesage:: Go on.


Howard Charles Green: He referred to the fact that Canadian troops going to Europe were to serve with commonwealth troops but that the airmen going to Europe were to serve with the United States air force. Of course that was confirmed today by the Minister of National Defence (Mr. Claxton). The Secretary of State for External Affairs used these words: "So that Canada as usual would be on both sides." I am sure that is a grave mistake. I think the time has come for Canada to review the direction that she is taking and to give a lead in rebuilding the commonwealth. That would be of far greater advantage to the United States as well as to ourselves and to the other members of the commonwealth; the greatest support the United States could get would be from a strong and united commonwealth. Canadian policy from now on should be directed to the rebuilding of the commonwealth.
I would remind the minister that one of his predecessors at Washington, one of the greatest living Canadians and one of the greatest members of his own party, Right Hon. Vincent Massey, has made various significant statements in Canada on this policy. I hold in my hand a quotation from a speech he made in Vancouver on November 15, 1946, and with this I close. It is entitled: "Canada's place in a troubled world." He said:
We have, in my belief, far greater influence in the world as a member of the British family than otherwise would be ours. We have, in a sense, a double status. I am quite sure from any experience that I may have been able to gain that the fact that Canada appears on the international scene, not only as an important country on her own account- which we are-but also as a member of a great association gives her both enhanced prestige and increased importance.

I suggest that at this time our greatest contribution to world peace would be to take a lead in rebuilding the strength of the British commonwealth.


Mr. T. H. Goode (Burnaby-Richmond):: Mr. Speaker, I have eight minutes before the adjournment hour, and that will be plenty of time for me to say what I have to say. I have no wish at this time to speak about national affairs.
We listened this afternoon to the hon. member for Coast-Capilano (Mr. Sinclair) who, I thought, made the finest speech I have heard in this House of Commons. I wish to take a different trend altogether, and to speak on behalf of a young lad who today is in Oakalla prison farm, which is situated in my riding. This young man is under sentence of death. I leave for the west tonight, and this is the only opportunity I will have to speak a word for him. I am pleased to note that the Secretary of State (Mr. Bradley) is in his seat, and I am sure he will take some notice of what I am going to say for this boy, who was sentenced to death as the result of a very serious crime- At that time he was sixteen years of age. He stood trial. An appeal was lodged on his behalf, but the appeal has been lost. Tonight at the age of seventeen he is in Oakalla prison farm, but with very little to look forward to.
Because of my interest in the prison farm and in boys' work there I have had the opportunity of meeting Francis Stephen Sykes a number of times. I have found him to be a boy who, while perhaps realizing what he has done, finds it rather hard at this time to comprehend the magnitude of the offence. I do not think 1 can plead that a boy of sixteen years does not know what he is doing; but I can say this, that not only is there a failure on the part of the boy to realize the immensity of his offence, but also that his community, his church and his school should study the position in which that boy is placed tonight.
The Address-Mr. Goode
I know that these events and affairs are subject to the regular red tape. I know it may take some time before a decision in the matter is reached, and I do not know what that decision will be. I do know, however, that it is the duty of the Secretary of State eventually, through the different processes, to arrive at a decision in a case of this kind. I ask the Secretary of State, indeed I plead with him, to speak to the Department of Justice and to the cabinet with a view to ultimately bringing about a commutation for this young lad.
I am rather in agreement with the imposition of the death sentence as we employ it in Canada. It is my view that if older men commit capital crimes, then they should be subject to the proper sentence of the law But when we have before us the example of a young lad of sixteen, without help from his parents and the community in which he lived, I think that not only we as members of the House of Commons, but the people in his community, those who are in charge of his school andi his church, could be considered just as responsible as he is.
Again I urge upon the Secretary of State, if any words of mine can help this boy, to give perhaps a little closer attention to the final decision than he perhaps would have given had I not spoken.
On motion of Mr. Campney the debate was adjourned.



BUSINESS OF THE HOUSE

Mr. Fournier (Hull):: Mr. Speaker, were we fortunate enough to conclude this debate tomorrow, the first order of business would be resolution No. 15 on the order paper, to introduce a measure to amend the Railway Act.


[Stage Direction]
At seven o'clock the house adjourned, without question put, pursuant to the order of the house passed on October 12, 1951.
[Stage Direction]

Friday, October 19, 1951